J or TRI: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Technology Services sector have probably already heard of Jacobs Solutions (J) and Thomson Reuters (TRI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Jacobs Solutions has a Zacks Rank of #2 (Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that J is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
J currently has a forward P/E ratio of 17.01, while TRI has a forward P/E of 40.76. We also note that J has a PEG ratio of 1.46. 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. TRI currently has a PEG ratio of 3.74.
Another notable valuation metric for J is its P/B ratio of 2.61. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TRI has a P/B of 6.08.
Based on these metrics and many more, J holds a Value grade of A, while TRI has a Value grade of D.
J sticks out from TRI in both our Zacks Rank and Style Scores models, so value investors will likely feel that J is the better option right now.
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Jacobs Solutions Inc. (J) : Free Stock Analysis Report
Thomson Reuters Corp (TRI) : Free Stock Analysis Report
