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GIC vs. GWW: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Industrial Services sector might want to consider either Global Industrial (GIC - Free Report) or W.W. Grainger (GWW - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Global Industrial and W.W. Grainger are both sporting a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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.

GIC currently has a forward P/E ratio of 19.00, while GWW has a forward P/E of 28.64. We also note that GIC has a PEG ratio of 1.19. 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. GWW currently has a PEG ratio of 2.35.

Another notable valuation metric for GIC is its P/B ratio of 4.92. 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, GWW has a P/B of 13.83.

These metrics, and several others, help GIC earn a Value grade of B, while GWW has been given a Value grade of D.

Both GIC and GWW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GIC is the superior value option right now.

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