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APG or SGSOY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Business - Services sector might want to consider either APi (APG - Free Report) or SGS SA (SGSOY - 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.

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 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.

APi and SGS SA are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that APG has an improving earnings outlook. 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.

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.

APG currently has a forward P/E ratio of 19.16, while SGSOY has a forward P/E of 20.05. We also note that APG has a PEG ratio of 1.05. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SGSOY currently has a PEG ratio of 3.36.

Another notable valuation metric for APG is its P/B ratio of 3.16. 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 37.52.

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

APG has seen stronger estimate revision activity and sports more attractive valuation metrics than SGSOY, so it seems like value investors will conclude that APG is the superior option right now.


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