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APG vs. ULS: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Business - Services stocks have likely encountered both APi (APG - Free Report) and UL Solutions Inc. (ULS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Currently, APi has a Zacks Rank of #2 (Buy), while UL Solutions Inc. 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. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 19.34, while ULS has a forward P/E of 30.41. We also note that APG has a PEG ratio of 1.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ULS currently has a PEG ratio of 6.96.

Another notable valuation metric for APG is its P/B ratio of 4.33. 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, ULS has a P/B of 12.93.

These are just a few of the metrics contributing to APG's Value grade of A and ULS's Value grade of C.

APG sticks out from ULS 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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