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TIXT vs. RCM: Which Stock Is the Better Value Option?
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Investors with an interest in Technology Services stocks have likely encountered both Telus International (TIXT - Free Report) and R1 RCM Inc. (RCM - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Telus International is sporting a Zacks Rank of #2 (Buy), while R1 RCM Inc. has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TIXT has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
TIXT currently has a forward P/E ratio of 8.28, while RCM has a forward P/E of 198.19. We also note that TIXT has a PEG ratio of 7.73. 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. RCM currently has a PEG ratio of 16.70.
Another notable valuation metric for TIXT is its P/B ratio of 0.34. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RCM has a P/B of 1.61.
These metrics, and several others, help TIXT earn a Value grade of A, while RCM has been given a Value grade of D.
TIXT stands above RCM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TIXT is the superior value option right now.
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TIXT vs. RCM: Which Stock Is the Better Value Option?
Investors with an interest in Technology Services stocks have likely encountered both Telus International (TIXT - Free Report) and R1 RCM Inc. (RCM - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Telus International is sporting a Zacks Rank of #2 (Buy), while R1 RCM Inc. has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TIXT has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
TIXT currently has a forward P/E ratio of 8.28, while RCM has a forward P/E of 198.19. We also note that TIXT has a PEG ratio of 7.73. 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. RCM currently has a PEG ratio of 16.70.
Another notable valuation metric for TIXT is its P/B ratio of 0.34. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RCM has a P/B of 1.61.
These metrics, and several others, help TIXT earn a Value grade of A, while RCM has been given a Value grade of D.
TIXT stands above RCM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TIXT is the superior value option right now.