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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 presents investors with the better value opportunity right now? Let's take a closer look.

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 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, Vontier Corporation has a Zacks Rank of #2 (Buy), while DocuSign has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VNT has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 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 8.47, while DOCU has a forward P/E of 37.47. We also note that VNT has a PEG ratio of 1.71. 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 2.27.

Another notable valuation metric for VNT is its P/B ratio of 7.87. 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, DOCU has a P/B of 53.56.

These metrics, and several others, help VNT earn a Value grade of A, while DOCU has been given a 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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