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CTG vs. DT: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors with an interest in Computers - IT Services stocks have likely encountered both Computer Task Group (CTG) and Dynatrace (DT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Computer Task Group and Dynatrace are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CTG currently has a forward P/E ratio of 11.48, while DT has a forward P/E of 67.51. We also note that CTG has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DT currently has a PEG ratio of 2.12.

Another notable valuation metric for CTG is its P/B ratio of 1.16. 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, DT has a P/B of 10.19.

These are just a few of the metrics contributing to CTG's Value grade of A and DT's Value grade of F.

Both CTG and DT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CTG is the superior value option right now.


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Computer Task Group, Incorporated (CTG) : Free Stock Analysis Report
 
Dynatrace, Inc. (DT) : Free Stock Analysis Report
 
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