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GIC or GWW: Which Is the Better Value Stock Right Now?

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Investors interested in Industrial Services stocks are likely familiar with Global Industrial (GIC - Free Report) and W.W. Grainger (GWW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Global Industrial has a Zacks Rank of #1 (Strong Buy), while W.W. Grainger has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GIC likely has seen a stronger improvement to its earnings outlook than GWW has recently. But this is only part of the picture for value investors.

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.

GIC currently has a forward P/E ratio of 19.74, while GWW has a forward P/E of 21.96. We also note that GIC has a PEG ratio of 1.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GWW currently has a PEG ratio of 1.69.

Another notable valuation metric for GIC is its P/B ratio of 5.64. 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, GWW has a P/B of 11.72.

These are just a few of the metrics contributing to GIC's Value grade of B and GWW's Value grade of C.

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


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W.W. Grainger, Inc. (GWW) - free report >>

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