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RKT vs. TT: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Technology Services sector might want to consider either Rocket Companies (RKT - Free Report) or Trane Technologies (TT - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Rocket Companies and Trane Technologies are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that RKT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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 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.
RKT currently has a forward P/E ratio of 8.88, while TT has a forward P/E of 30.36. We also note that RKT has a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TT currently has a PEG ratio of 2.31.
Another notable valuation metric for RKT is its P/B ratio of 5.68. 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, TT has a P/B of 6.18.
These metrics, and several others, help RKT earn a Value grade of A, while TT has been given a Value grade of D.
RKT has seen stronger estimate revision activity and sports more attractive valuation metrics than TT, so it seems like value investors will conclude that RKT is the superior option right now.
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RKT vs. TT: Which Stock Is the Better Value Option?
Investors looking for stocks in the Technology Services sector might want to consider either Rocket Companies (RKT - Free Report) or Trane Technologies (TT - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Rocket Companies and Trane Technologies are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that RKT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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 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.
RKT currently has a forward P/E ratio of 8.88, while TT has a forward P/E of 30.36. We also note that RKT has a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TT currently has a PEG ratio of 2.31.
Another notable valuation metric for RKT is its P/B ratio of 5.68. 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, TT has a P/B of 6.18.
These metrics, and several others, help RKT earn a Value grade of A, while TT has been given a Value grade of D.
RKT has seen stronger estimate revision activity and sports more attractive valuation metrics than TT, so it seems like value investors will conclude that RKT is the superior option right now.