CACI vs. GIB: Which Stock Is the Better Value Option?
Investors interested in stocks from the Computer - Services sector have probably already heard of CACI International (CACI) and CGI Group (GIB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, CACI International has a Zacks Rank of #2 (Buy), while CGI Group has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CACI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CACI currently has a forward P/E ratio of 18.47, while GIB has a forward P/E of 19.18. We also note that CACI has a PEG ratio of 1.86. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GIB currently has a PEG ratio of 2.02.
Another notable valuation metric for CACI is its P/B ratio of 2.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GIB has a P/B of 4.03.
These metrics, and several others, help CACI earn a Value grade of B, while GIB has been given a Value grade of C.
CACI has seen stronger estimate revision activity and sports more attractive valuation metrics than GIB, so it seems like value investors will conclude that CACI is the superior option right now.
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CACI International, Inc. (CACI) : Free Stock Analysis Report
CGI Group, Inc. (GIB) : Free Stock Analysis Report
