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

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Investors looking for stocks in the Engineering - R and D Services sector might want to consider either KBR Inc. (KBR - Free Report) or ROTORK PLC . But which of these two stocks presents investors with the better value opportunity right now? 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.

Both KBR Inc. and ROTORK PLC have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

KBR currently has a forward P/E ratio of 11.94, while RTOXY has a forward P/E of 23.04. We also note that KBR has a PEG ratio of 1.40. 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.

Another notable valuation metric for KBR is its P/B ratio of 1.61. 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 5.29.

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

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


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