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INTU vs. MSFT: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Computer - Software stocks have likely encountered both Intuit (INTU - Free Report) and Microsoft (MSFT - 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 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.
Intuit has a Zacks Rank of #2 (Buy), while Microsoft has a Zacks Rank of #3 (Hold) right now. This means that INTU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
INTU currently has a forward P/E ratio of 13.80, while MSFT has a forward P/E of 24.15. We also note that INTU has a PEG ratio of 0.94. 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. MSFT currently has a PEG ratio of 1.46.
Another notable valuation metric for INTU is its P/B ratio of 4.24. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MSFT has a P/B of 7.5.
These are just a few of the metrics contributing to INTU's Value grade of B and MSFT's Value grade of D.
INTU has seen stronger estimate revision activity and sports more attractive valuation metrics than MSFT, so it seems like value investors will conclude that INTU is the superior option right now.
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INTU vs. MSFT: Which Stock Should Value Investors Buy Now?
Investors with an interest in Computer - Software stocks have likely encountered both Intuit (INTU - Free Report) and Microsoft (MSFT - 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 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.
Intuit has a Zacks Rank of #2 (Buy), while Microsoft has a Zacks Rank of #3 (Hold) right now. This means that INTU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
INTU currently has a forward P/E ratio of 13.80, while MSFT has a forward P/E of 24.15. We also note that INTU has a PEG ratio of 0.94. 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. MSFT currently has a PEG ratio of 1.46.
Another notable valuation metric for INTU is its P/B ratio of 4.24. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MSFT has a P/B of 7.5.
These are just a few of the metrics contributing to INTU's Value grade of B and MSFT's Value grade of D.
INTU has seen stronger estimate revision activity and sports more attractive valuation metrics than MSFT, so it seems like value investors will conclude that INTU is the superior option right now.