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DELL or CSGP: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Computers - IT Services sector have probably already heard of Dell Technologies (DELL - Free Report) and CoStar Group (CSGP - 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.

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 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.

Right now, Dell Technologies is sporting a Zacks Rank of #1 (Strong Buy), while CoStar Group has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that DELL likely has seen a stronger improvement to its earnings outlook than CSGP has recently. But this is just one piece of the puzzle 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DELL currently has a forward P/E ratio of 6.52, while CSGP has a forward P/E of 36.60. We also note that DELL has a PEG ratio of 0.54. 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. CSGP currently has a PEG ratio of 2.19.

Another notable valuation metric for DELL is its P/B ratio of 2.28. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CSGP has a P/B of 4.46.

Based on these metrics and many more, DELL holds a Value grade of A, while CSGP has a Value grade of F.

DELL stands above CSGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DELL is the superior value option right now.


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