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SMGZY or CXM: Which Is the Better Value Stock Right Now?
Investors with an interest in Technology Services stocks have likely encountered both Smiths Group PLC (SMGZY - Free Report) and Sprinkler (CXM - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Smiths Group PLC has a Zacks Rank of #2 (Buy), while Sprinkler 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 SMGZY is likely seeing its earnings outlook improve to a greater extent. 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.
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.
SMGZY currently has a forward P/E ratio of 17.36, while CXM has a forward P/E of 68.23. We also note that SMGZY has a PEG ratio of 1.48. 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. CXM currently has a PEG ratio of 2.27.
Another notable valuation metric for SMGZY is its P/B ratio of 2.15. 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, CXM has a P/B of 6.52.
These metrics, and several others, help SMGZY earn a Value grade of B, while CXM has been given a Value grade of D.
SMGZY sticks out from CXM in both our Zacks Rank and Style Scores models, so value investors will likely feel that SMGZY is the better option right now.