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III vs. FC: Which Stock Is the Better Value Option?

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Investors interested in Consulting Services stocks are likely familiar with Information Services Group (III - Free Report) and Franklin Covey (FC - Free Report) . 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.

Currently, Information Services Group has a Zacks Rank of #2 (Buy), while Franklin Covey has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that III is likely seeing its earnings outlook improve to a greater extent. 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.

III currently has a forward P/E ratio of 24.56, while FC has a forward P/E of 871.39. We also note that III has a PEG ratio of 1.75. 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. FC currently has a PEG ratio of 58.09.

Another notable valuation metric for III is its P/B ratio of 2.27. 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, FC has a P/B of 6.76.

These metrics, and several others, help III earn a Value grade of A, while FC has been given a Value grade of C.

III is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that III is likely the superior value option right now.


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