III vs. ACN: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Consulting Services sector might want to consider either Information Services Group (III) or Accenture (ACN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Information Services Group and Accenture have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
III currently has a forward P/E ratio of 19.03, while ACN has a forward P/E of 35.97. We also note that III has a PEG ratio of 1.19. 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. ACN currently has a PEG ratio of 3.60.
Another notable valuation metric for III is its P/B ratio of 2.83. 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, ACN has a P/B of 10.09.
These are just a few of the metrics contributing to III's Value grade of B and ACN's Value grade of D.
Both III and ACN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that III is the superior value option right now.
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Information Services Group, Inc. (III) : Free Stock Analysis Report
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