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PWR vs. RTOXY: Which Stock Is the Better Value Option?

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Investors with an interest in Engineering - R and D Services stocks have likely encountered both Quanta Services (PWR - Free Report) and ROTORK PLC . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Quanta Services and ROTORK PLC are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

PWR currently has a forward P/E ratio of 11.45, while RTOXY has a forward P/E of 27.52. We also note that PWR has a PEG ratio of 1.43. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RTOXY currently has a PEG ratio of 2.39.

Another notable valuation metric for PWR is its P/B ratio of 1.29. 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, RTOXY has a P/B of 5.95.

These are just a few of the metrics contributing to PWR's Value grade of A and RTOXY's Value grade of D.

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


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