U.S. Markets closed
  • S&P 500

    4,701.21
    +14.46 (+0.31%)
     
  • Dow 30

    35,754.75
    +35.32 (+0.10%)
     
  • Nasdaq

    15,786.99
    +100.07 (+0.64%)
     
  • Russell 2000

    2,271.71
    +17.92 (+0.80%)
     
  • Crude Oil

    72.67
    +0.31 (+0.43%)
     
  • Gold

    1,784.80
    -0.70 (-0.04%)
     
  • Silver

    22.44
    +0.01 (+0.04%)
     
  • EUR/USD

    1.1346
    +0.0073 (+0.6467%)
     
  • 10-Yr Bond

    1.5090
    +0.0290 (+1.96%)
     
  • Vix

    19.90
    -1.99 (-9.09%)
     
  • GBP/USD

    1.3205
    -0.0037 (-0.2813%)
     
  • USD/JPY

    113.7040
    +0.1640 (+0.1444%)
     
  • BTC-USD

    50,523.44
    -103.84 (-0.21%)
     
  • CMC Crypto 200

    1,320.56
    +15.44 (+1.18%)
     
  • FTSE 100

    7,337.05
    -2.85 (-0.04%)
     
  • Nikkei 225

    28,860.62
    +405.02 (+1.42%)
     

REZI vs. JCI: Which Stock Is the Better Value Option?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Investors interested in stocks from the Security and Safety Services sector have probably already heard of Resideo Technologies (REZI) and Johnson Controls (JCI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Resideo Technologies and Johnson Controls are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that REZI likely has seen a stronger improvement to its earnings outlook than JCI has recently. 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.

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.

REZI currently has a forward P/E ratio of 11.98, while JCI has a forward P/E of 18.47. We also note that REZI has a PEG ratio of 0.98. 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. JCI currently has a PEG ratio of 2.31.

Another notable valuation metric for REZI is its P/B ratio of 1.29. 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, JCI has a P/B of 1.82.

Based on these metrics and many more, REZI holds a Value grade of B, while JCI has a Value grade of C.

REZI stands above JCI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that REZI is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Resideo Technologies, Inc. (REZI) : Free Stock Analysis Report
 
Johnson Controls International plc (JCI) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research