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SMGZY or SWCH: Which Is the Better Value Stock Right Now?

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Investors with an interest in Technology Services stocks have likely encountered both Smiths Group PLC (SMGZY - Free Report) and Switch . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Smiths Group PLC has a Zacks Rank of #2 (Buy), while Switch has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that SMGZY likely has seen a stronger improvement to its earnings outlook than SWCH has recently. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SMGZY currently has a forward P/E ratio of 15.79, while SWCH has a forward P/E of 63.52. We also note that SMGZY has a PEG ratio of 2.70. 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. SWCH currently has a PEG ratio of 5.29.

Another notable valuation metric for SMGZY is its P/B ratio of 2.55. 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, SWCH has a P/B of 3.71.

Based on these metrics and many more, SMGZY holds a Value grade of B, while SWCH has a Value grade of F.

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


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