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BGSF vs. SGSOY: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Business - Services stocks have likely encountered both BGSF (BGSF - Free Report) and SGS SA (SGSOY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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, BGSF has a Zacks Rank of #2 (Buy), while SGS SA has a Zacks Rank of #5 (Strong Sell). This means that BGSF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

BGSF currently has a forward P/E ratio of 12.07, while SGSOY has a forward P/E of 23.21. We also note that BGSF has a PEG ratio of 0.60. 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. SGSOY currently has a PEG ratio of 3.62.

Another notable valuation metric for BGSF is its P/B ratio of 1.39. 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, SGSOY has a P/B of 12.87.

These metrics, and several others, help BGSF earn a Value grade of A, while SGSOY has been given a Value grade of D.

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


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