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SNX or WIT: Which Is the Better Value Stock Right Now?

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·2 min read
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  • WIPRO.BO
  • SNX

Investors with an interest in Business - Software Services stocks have likely encountered both Synnex (SNX) and Wipro Limited (WIT). 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks 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 only part of the picture 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SNX currently has a forward P/E ratio of 12.69, while WIT has a forward P/E of 31.34. We also note that SNX has a PEG ratio of 1.22. 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. WIT currently has a PEG ratio of 3.48.

Another notable valuation metric for SNX is its P/B ratio of 2.62. 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, WIT has a P/B of 5.93.

Based on these metrics and many more, SNX holds a Value grade of A, while WIT has a Value grade of C.

SNX has seen stronger estimate revision activity and sports more attractive valuation metrics than WIT, so it seems like value investors will conclude that SNX is the superior option right now.


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Wipro Limited (WIT) : Free Stock Analysis Report
 
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