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DFIN vs. QUOT: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Internet - Software and Services sector might want to consider either Donnelley Financial Solutions (DFIN) or Quotient Technology (QUOT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Donnelley Financial Solutions has a Zacks Rank of #2 (Buy), while Quotient Technology has a Zacks Rank of #3 (Hold) right now. This means that DFIN'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 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 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.

DFIN currently has a forward P/E ratio of 7.16, while QUOT has a forward P/E of 144.57. We also note that DFIN has a PEG ratio of 5.59. 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. QUOT currently has a PEG ratio of 7.23.

Another notable valuation metric for DFIN is its P/B ratio of 1.19. 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, QUOT has a P/B of 3.14.

Based on these metrics and many more, DFIN holds a Value grade of A, while QUOT has a Value grade of D.

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


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