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CTSH vs. WIT: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Business - Software Services sector have probably already heard of Cognizant (CTSH - Free Report) and Wipro Limited (WIT - Free Report) . 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.
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.
Currently, Cognizant has a Zacks Rank of #2 (Buy), while Wipro Limited has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CTSH is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
CTSH currently has a forward P/E ratio of 19.30, while WIT has a forward P/E of 31.83. We also note that CTSH has a PEG ratio of 1.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WIT currently has a PEG ratio of 3.54.
Another notable valuation metric for CTSH is its P/B ratio of 3.66. 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 6.55.
Based on these metrics and many more, CTSH holds a Value grade of B, while WIT has a Value grade of C.
CTSH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CTSH is likely the superior value option right now.
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CTSH vs. WIT: Which Stock Is the Better Value Option?
Investors interested in stocks from the Business - Software Services sector have probably already heard of Cognizant (CTSH - Free Report) and Wipro Limited (WIT - Free Report) . 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.
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.
Currently, Cognizant has a Zacks Rank of #2 (Buy), while Wipro Limited has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CTSH is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
CTSH currently has a forward P/E ratio of 19.30, while WIT has a forward P/E of 31.83. We also note that CTSH has a PEG ratio of 1.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WIT currently has a PEG ratio of 3.54.
Another notable valuation metric for CTSH is its P/B ratio of 3.66. 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 6.55.
Based on these metrics and many more, CTSH holds a Value grade of B, while WIT has a Value grade of C.
CTSH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CTSH is likely the superior value option right now.