Investors looking for stocks in the Computer - Services sector might want to consider either CACI International (CACI - Free Report) or CGI Group (GIB - 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.
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 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.
Currently, CACI International has a Zacks Rank of #1 (Strong Buy), while CGI Group has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CACI has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
CACI currently has a forward P/E ratio of 16.81, while GIB has a forward P/E of 17.86. We also note that CACI has a PEG ratio of 1.68. 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. GIB currently has a PEG ratio of 1.98.
Another notable valuation metric for CACI is its P/B ratio of 1.94. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GIB has a P/B of 3.47.
Based on these metrics and many more, CACI holds a Value grade of B, while GIB has a Value grade of C.
CACI sticks out from GIB in both our Zacks Rank and Style Scores models, so value investors will likely feel that CACI is the better option right now.