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KBR or RTOXY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Engineering - R and D Services sector might want to consider either KBR Inc. (KBR - Free Report) or ROTORK PLC . 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 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, KBR Inc. is sporting a Zacks Rank of #2 (Buy), while ROTORK PLC has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that KBR likely has seen a stronger improvement to its earnings outlook than RTOXY has recently. But this is just one factor that value investors are interested in.

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.

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.

KBR currently has a forward P/E ratio of 10.40, while RTOXY has a forward P/E of 18.42. We also note that KBR has a PEG ratio of 0.98. 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. RTOXY currently has a PEG ratio of 1.60.

Another notable valuation metric for KBR is its P/B ratio of 1.50. 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, RTOXY has a P/B of 4.11.

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

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


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