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KBR or RTOXY: Which Is the Better Value Stock Right Now?

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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 presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, KBR Inc. is sporting a Zacks Rank of #2 (Buy), while ROTORK PLC has a Zacks Rank of #4 (Sell). This means that KBR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 14.72, while RTOXY has a forward P/E of 24.18. We also note that KBR has a PEG ratio of 1.64. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RTOXY currently has a PEG ratio of 1.93.

Another notable valuation metric for KBR is its P/B ratio of 1.94. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RTOXY has a P/B of 5.13.

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

KBR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KBR is likely the superior value option right now.


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