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Investors interested in stocks from the Consulting Services sector have probably already heard of Booz Allen Hamilton (BAH) and Gartner (IT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Booz Allen Hamilton has a Zacks Rank of #2 (Buy), while Gartner has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that BAH likely has seen a stronger improvement to its earnings outlook than IT has recently. But this is just one factor that value investors are interested in.
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.
BAH currently has a forward P/E ratio of 21.61, while IT has a forward P/E of 36.94. We also note that BAH has a PEG ratio of 1.62. 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. IT currently has a PEG ratio of 2.74.
Another notable valuation metric for BAH is its P/B ratio of 14.38. 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, IT has a P/B of 35.90.
These are just a few of the metrics contributing to BAH's Value grade of B and IT's Value grade of D.
BAH 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 BAH is likely the superior value option right now.
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Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report