Investors looking for stocks in the Internet - Software sector might want to consider either MiX Telematics Limited (MIXT - Free Report) or NIC (EGOV - 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.
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.
MiX Telematics Limited and NIC 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. But this is only part of the picture for value investors.
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.
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.
MIXT currently has a forward P/E ratio of 18.76, while EGOV has a forward P/E of 22.07. We also note that MIXT has a PEG ratio of 0.75. 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. EGOV currently has a PEG ratio of 2.21.
Another notable valuation metric for MIXT is its P/B ratio of 2.92. 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, EGOV has a P/B of 4.92.
These are just a few of the metrics contributing to MIXT's Value grade of A and EGOV's Value grade of C.
Both MIXT and EGOV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MIXT is the superior value option right now.