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SMGZY or TRI: Which Is the Better Value Stock Right Now?

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Investors interested in Technology Services stocks are likely familiar with Smiths Group PLC (SMGZY - Free Report) and Thomson Reuters (TRI - 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 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.

Smiths Group PLC has a Zacks Rank of #2 (Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold) right now. This means that SMGZY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.

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.

SMGZY currently has a forward P/E ratio of 16.56, while TRI has a forward P/E of 46.60. We also note that SMGZY has a PEG ratio of 1.74. 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. TRI currently has a PEG ratio of 4.58.

Another notable valuation metric for SMGZY is its P/B ratio of 2.62. 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, TRI has a P/B of 6.99.

Based on these metrics and many more, SMGZY holds a Value grade of B, while TRI has a Value grade of D.

SMGZY stands above TRI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SMGZY is the superior value option right now.


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