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

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Investors interested in Engineering - R and D Services stocks are likely familiar with KBR Inc. (KBR - Free Report) and ROTORK PLC . 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 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.

KBR Inc. and ROTORK PLC are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KBR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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 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 16.08, while RTOXY has a forward P/E of 22.68. We also note that KBR has a PEG ratio of 1.79. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RTOXY currently has a PEG ratio of 1.81.

Another notable valuation metric for KBR is its P/B ratio of 2.11. 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, RTOXY has a P/B of 5.21.

Based on these metrics and many more, KBR holds a Value grade of B, while RTOXY has a Value grade of D.

KBR sticks out from RTOXY in both our Zacks Rank and Style Scores models, so value investors will likely feel that KBR is the better option right now.


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