Back to top

Image: Bigstock

GFN vs. WNS: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Business - Services stocks have likely encountered both General Finance (GFN - Free Report) and WNS (Holdings) Limited (WNS - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Right now, General Finance is sporting a Zacks Rank of #2 (Buy), while WNS (Holdings) Limited has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GFN 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

GFN currently has a forward P/E ratio of 15.93, while WNS has a forward P/E of 22.09. We also note that GFN has a PEG ratio of 1.33. 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. WNS currently has a PEG ratio of 1.79.

Another notable valuation metric for GFN is its P/B ratio of 2.36. 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, WNS has a P/B of 6.16.

These are just a few of the metrics contributing to GFN's Value grade of B and WNS's Value grade of C.

GFN has seen stronger estimate revision activity and sports more attractive valuation metrics than WNS, so it seems like value investors will conclude that GFN is the superior option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


General Finance Corporation (GFN) - free report >>

WNS (Holdings) Limited (WNS) - free report >>

Published in