GIC vs. GWW: Which Stock Is the Better Value Option?
Investors interested in stocks from the Industrial Services sector have probably already heard of Global Industrial (GIC) and W.W. Grainger (GWW). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Global Industrial and W.W. Grainger are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that GIC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GIC currently has a forward P/E ratio of 19.03, while GWW has a forward P/E of 20.46. We also note that GIC has a PEG ratio of 1.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GWW currently has a PEG ratio of 1.57.
Another notable valuation metric for GIC is its P/B ratio of 5.44. 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, GWW has a P/B of 10.89.
These metrics, and several others, help GIC earn a Value grade of B, while GWW has been given a Value grade of C.
GIC sticks out from GWW in both our Zacks Rank and Style Scores models, so value investors will likely feel that GIC is the better option right now.
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Global Industrial Company (GIC) : Free Stock Analysis Report
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
