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PWR vs. RTOXY: Which Stock Should Value Investors Buy Now?

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Investors interested in Engineering - R and D Services stocks are likely familiar with Quanta Services (PWR - Free Report) and ROTORK PLC . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Quanta Services has a Zacks Rank of #2 (Buy), while ROTORK PLC has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PWR has an improving earnings outlook. But this is only part of the picture for value investors.

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.

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.

PWR currently has a forward P/E ratio of 12.71, while RTOXY has a forward P/E of 25.37. We also note that PWR has a PEG ratio of 0.88. 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. RTOXY currently has a PEG ratio of 2.03.

Another notable valuation metric for PWR is its P/B ratio of 1.50. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RTOXY has a P/B of 5.60.

Based on these metrics and many more, PWR holds a Value grade of A, while RTOXY has a Value grade of D.

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


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