Back to top

Image: Bigstock

IKTSY or FDS: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Business - Information Services sector have probably already heard of INTERTEK GP (IKTSY - Free Report) and FactSet Research (FDS - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, INTERTEK GP is sporting a Zacks Rank of #2 (Buy), while FactSet Research has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IKTSY likely has seen a stronger improvement to its earnings outlook than FDS has recently. But this is just one factor that value investors are interested in.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

IKTSY currently has a forward P/E ratio of 20.35, while FDS has a forward P/E of 28.52. We also note that IKTSY has a PEG ratio of 2.14. 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. FDS currently has a PEG ratio of 2.85.

Another notable valuation metric for IKTSY is its P/B ratio of 5.67. 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, FDS has a P/B of 10.98.

These are just a few of the metrics contributing to IKTSY's Value grade of B and FDS's Value grade of D.

IKTSY 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 IKTSY is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


FactSet Research Systems Inc. (FDS) - free report >>

INTERTEK GP (IKTSY) - free report >>

Published in