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

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Investors interested in stocks from the Business - Services sector have probably already heard of APi (APG - Free Report) and SGS SA (SGSOY - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, APi has a Zacks Rank of #2 (Buy), while SGS SA 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 APG is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

APG currently has a forward P/E ratio of 17.57, while SGSOY has a forward P/E of 21.62. We also note that APG has a PEG ratio of 0.99. 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. SGSOY currently has a PEG ratio of 3.63.

Another notable valuation metric for APG is its P/B ratio of 2.78. 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, SGSOY has a P/B of 21.28.

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

APG sticks out from SGSOY in both our Zacks Rank and Style Scores models, so value investors will likely feel that APG is the better option right now.


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