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HPE vs. IBM: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE - Free Report) and IBM (IBM - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while IBM has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HPE is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HPE currently has a forward P/E ratio of 17.14, while IBM has a forward P/E of 19.01. We also note that HPE has a PEG ratio of 0.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBM currently has a PEG ratio of 2.30.
Another notable valuation metric for HPE is its P/B ratio of 3.07. 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, IBM has a P/B of 6.39.
Based on these metrics and many more, HPE holds a Value grade of B, while IBM has a Value grade of C.
HPE has seen stronger estimate revision activity and sports more attractive valuation metrics than IBM, so it seems like value investors will conclude that HPE is the superior option right now.
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HPE vs. IBM: Which Stock Should Value Investors Buy Now?
Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE - Free Report) and IBM (IBM - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while IBM has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HPE is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HPE currently has a forward P/E ratio of 17.14, while IBM has a forward P/E of 19.01. We also note that HPE has a PEG ratio of 0.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBM currently has a PEG ratio of 2.30.
Another notable valuation metric for HPE is its P/B ratio of 3.07. 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, IBM has a P/B of 6.39.
Based on these metrics and many more, HPE holds a Value grade of B, while IBM has a Value grade of C.
HPE has seen stronger estimate revision activity and sports more attractive valuation metrics than IBM, so it seems like value investors will conclude that HPE is the superior option right now.