Back to top

Image: Bigstock

CIB or FSS: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Diversified Operations stocks have likely encountered both Grupo Cibest (CIB - Free Report) and Federal Signal (FSS - 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, Grupo Cibest is sporting a Zacks Rank of #1 (Strong Buy), while Federal Signal has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CIB is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

CIB currently has a forward P/E ratio of 7.68, while FSS has a forward P/E of 31.36. We also note that CIB has a PEG ratio of 1.10. 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. FSS currently has a PEG ratio of 2.24.

Another notable valuation metric for CIB is its P/B ratio of 2.58. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FSS has a P/B of 6.02.

Based on these metrics and many more, CIB holds a Value grade of A, while FSS has a Value grade of D.

CIB sticks out from FSS in both our Zacks Rank and Style Scores models, so value investors will likely feel that CIB is the better option right now.


See More Zacks Research for These Tickers


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


Federal Signal Corporation (FSS) - free report >>

Grupo Cibest S.A. - Sponsored ADR (CIB) - free report >>

Published in