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HSC vs. TRI: Which Stock Should Value Investors Buy Now?

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Investors interested in Technology Services stocks are likely familiar with Harsco and Thomson Reuters (TRI - 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.

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

Harsco has a Zacks Rank of #2 (Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HSC 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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

HSC currently has a forward P/E ratio of 17.75, while TRI has a forward P/E of 59.10. We also note that HSC has a PEG ratio of 1.78. 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. TRI currently has a PEG ratio of 4.91.

Another notable valuation metric for HSC is its P/B ratio of 1.74. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TRI has a P/B of 3.57.

These are just a few of the metrics contributing to HSC's Value grade of B and TRI's Value grade of D.

HSC 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 HSC is likely the superior value option right now.


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