Investors interested in stocks from the Internet - Software sector have probably already heard of MiX Telematics Limited (MIXT) and NIC (EGOV). 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 MiX Telematics Limited and NIC 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. However, value investors will care about much more than just this.
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.
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.
MIXT currently has a forward P/E ratio of 17.90, while EGOV has a forward P/E of 21.81. We also note that MIXT has a PEG ratio of 0.72. 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. EGOV currently has a PEG ratio of 2.18.
Another notable valuation metric for MIXT is its P/B ratio of 2.78. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, EGOV has a P/B of 4.87.
Based on these metrics and many more, MIXT holds a Value grade of A, while EGOV has a Value grade of C.
Both MIXT and EGOV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MIXT is the superior value option right now.
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MiX Telematics Limited (MIXT) : Free Stock Analysis Report
NIC Inc. (EGOV) : Free Stock Analysis Report
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