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CNXC vs. SGSOY: Which Stock Is the Better Value Option?

Investors with an interest in Business - Services stocks have likely encountered both Concentrix Corporation (CNXC) and SGS SA (SGSOY). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Concentrix Corporation has a Zacks Rank of #2 (Buy), while SGS SA has a Zacks Rank of #4 (Sell). This means that CNXC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CNXC currently has a forward P/E ratio of 9.61, while SGSOY has a forward P/E of 23.30. We also note that CNXC has a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SGSOY currently has a PEG ratio of 3.65.

Another notable valuation metric for CNXC is its P/B ratio of 2.28. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SGSOY has a P/B of 19.84.

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

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


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