Investors interested in Business - Services stocks are likely familiar with APi (APG) and SGS SA (SGSOY). But which of these two companies is the best option for those looking for undervalued stocks? 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, APi is sporting a Zacks Rank of #2 (Buy), while SGS SA has a Zacks Rank of #4 (Sell). This means that APG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
APG currently has a forward P/E ratio of 13.42, while SGSOY has a forward P/E of 24.01. We also note that APG has a PEG ratio of 0.64. 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. SGSOY currently has a PEG ratio of 3.27.
Another notable valuation metric for APG is its P/B ratio of 1.84. 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, SGSOY has a P/B of 14.18.
These metrics, and several others, help APG earn a Value grade of B, while SGSOY has been given a Value grade of C.
APG sticks out from SGSOY in both our Zacks Rank and Style Scores models, so value investors will likely feel that APG is the better option right now.
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APi Group Corporation (APG) : Free Stock Analysis Report
SGS SA (SGSOY) : Free Stock Analysis Report
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