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NVEE vs. ACN: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in Consulting Services stocks are likely familiar with NV5 Holdings (NVEE) and Accenture (ACN). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both NV5 Holdings and Accenture have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

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.

NVEE currently has a forward P/E ratio of 15.17, while ACN has a forward P/E of 27.34. We also note that NVEE has a PEG ratio of 0.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ACN currently has a PEG ratio of 2.65.

Another notable valuation metric for NVEE is its P/B ratio of 2.52. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ACN has a P/B of 8.72.

Based on these metrics and many more, NVEE holds a Value grade of B, while ACN has a Value grade of D.

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


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Zacks Investment Research