Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Business - Services stocks are likely familiar with APi (APG - Free Report) and SGS SA (SGSOY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, APi has a Zacks Rank of #2 (Buy), while SGS SA has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that APG 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.

APG currently has a forward P/E ratio of 20.88, while SGSOY has a forward P/E of 24.13. We also note that APG has a PEG ratio of 1.17. 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. SGSOY currently has a PEG ratio of 3.21.

Another notable valuation metric for APG is its P/B ratio of 4.42. 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, SGSOY has a P/B of 30.74.

Based on these metrics and many more, APG holds a Value grade of B, while SGSOY has a Value grade of C.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


SGS SA (SGSOY) - free report >>

APi Group Corporation (APG) - free report >>

Published in