HCKT or IT: Which Is the Better Value Stock Right Now?

IT HCKT

Investors looking for stocks in the Consulting Services sector might want to consider either Hackett Group (HCKT - Free Report) or Gartner (IT - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Hackett Group and Gartner are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

HCKT currently has a forward P/E ratio of 11.34, while IT has a forward P/E of 33.69. We also note that HCKT has a PEG ratio of 0.84. 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. IT currently has a PEG ratio of 5.18.

Another notable valuation metric for HCKT is its P/B ratio of 9.93. 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, IT has a P/B of 111.11.

Based on these metrics and many more, HCKT holds a Value grade of A, while IT has a Value grade of C.

Both HCKT and IT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HCKT is the superior value option right now.

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