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NVEE vs. ACN: Which Stock Is the Better Value Option?

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Investors interested in Consulting Services stocks are likely familiar with NV5 Holdings (NVEE - Free Report) and Accenture (ACN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both NV5 Holdings and Accenture are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

NVEE currently has a forward P/E ratio of 22.27, while ACN has a forward P/E of 36.79. We also note that NVEE has a PEG ratio of 1.38. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ACN currently has a PEG ratio of 3.68.

Another notable valuation metric for NVEE is its P/B ratio of 2.53. 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, ACN has a P/B of 10.32.

These metrics, and several others, help NVEE earn a Value grade of B, while ACN has been given a Value grade of D.

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


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