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FLR or ACM: Which Is the Better Value Stock Right Now?

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Investors interested in Engineering - R and D Services stocks are likely familiar with Fluor (FLR - Free Report) and Aecom Technology (ACM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Fluor has a Zacks Rank of #2 (Buy), while Aecom Technology has a Zacks Rank of #3 (Hold). This means that FLR'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.

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.

FLR currently has a forward P/E ratio of 17.21, while ACM has a forward P/E of 22.59. We also note that FLR has a PEG ratio of 0.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ACM currently has a PEG ratio of 2.05.

Another notable valuation metric for FLR is its P/B ratio of 2.12. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ACM has a P/B of 4.28.

These metrics, and several others, help FLR earn a Value grade of A, while ACM has been given a Value grade of C.

FLR has seen stronger estimate revision activity and sports more attractive valuation metrics than ACM, so it seems like value investors will conclude that FLR is the superior option right now.


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