Investors interested in stocks from the Security and Safety Services sector have probably already heard of Johnson Controls (JCI) and Axon Enterprise (AAXN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.
Right now, Johnson Controls is sporting a Zacks Rank of #2 (Buy), while Axon Enterprise 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 JCI is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
JCI currently has a forward P/E ratio of 20.25, while AAXN has a forward P/E of 68.91. We also note that JCI has a PEG ratio of 2.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AAXN currently has a PEG ratio of 2.76.
Another notable valuation metric for JCI is its P/B ratio of 1.64. 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, AAXN has a P/B of 8.30.
These metrics, and several others, help JCI earn a Value grade of A, while AAXN has been given a Value grade of F.
JCI sticks out from AAXN in both our Zacks Rank and Style Scores models, so value investors will likely feel that JCI is the better option right now.
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Johnson Controls International plc (JCI) : Free Stock Analysis Report
Axon Enterprise, Inc (AAXN) : Free Stock Analysis Report
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