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Innovator International Developed Power Buffer ETF - November (INOV) - free report >>
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Innovator International Developed Power Buffer ETF - November (INOV) - free report >>
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CTG or INOV: Which Is the Better Value Stock Right Now?
Investors with an interest in Computers - IT Services stocks have likely encountered both Computer Task Group and Inovalon Holdings (INOV - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Computer Task Group has a Zacks Rank of #2 (Buy), while Inovalon Holdings has a Zacks Rank of #3 (Hold). This means that CTG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
CTG currently has a forward P/E ratio of 13, while INOV has a forward P/E of 33.37. We also note that CTG has a PEG ratio of 0.87. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. INOV currently has a PEG ratio of 2.38.
Another notable valuation metric for CTG is its P/B ratio of 0.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, INOV has a P/B of 3.62.
These are just a few of the metrics contributing to CTG's Value grade of B and INOV's Value grade of D.
CTG stands above INOV thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CTG is the superior value option right now.