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SNX vs. WIT: Which Stock Should Value Investors Buy Now?

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Investors interested in Business - Software Services stocks are likely familiar with Synnex (SNX) and Wipro Limited (WIT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Synnex and Wipro Limited are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that SNX likely has seen a stronger improvement to its earnings outlook than WIT has recently. But this is just one piece of the puzzle for value investors.

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.

SNX currently has a forward P/E ratio of 14.41, while WIT has a forward P/E of 29.67. We also note that SNX has a PEG ratio of 1.39. 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. WIT currently has a PEG ratio of 3.30.

Another notable valuation metric for SNX 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, WIT has a P/B of 6.11.

These are just a few of the metrics contributing to SNX's Value grade of A and WIT's Value grade of C.

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


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