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VNT or DOCU: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Technology Services sector have probably already heard of Vontier Corporation (VNT - Free Report) and DocuSign (DOCU - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Vontier Corporation is sporting a Zacks Rank of #1 (Strong Buy), while DocuSign has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VNT is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.

VNT currently has a forward P/E ratio of 11.90, while DOCU has a forward P/E of 143.35. We also note that VNT has a PEG ratio of 1.54. 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. DOCU currently has a PEG ratio of 3.06.

Another notable valuation metric for VNT is its P/B ratio of 16.30. 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, DOCU has a P/B of 226.74.

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

VNT sticks out from DOCU in both our Zacks Rank and Style Scores models, so value investors will likely feel that VNT is the better option right now.


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