SNX or WIT: Which Is the Better Value Stock Right Now?
SNX vs. WIT: Which Stock Is the Better Value Option?
Investors interested in stocks from the Business - Software Services sector have probably already heard of Synnex (SNX) and Wipro Limited (WIT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Synnex has a Zacks Rank of #2 (Buy), while Wipro Limited has a Zacks Rank of #3 (Hold). This means that SNX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SNX currently has a forward P/E ratio of 11.49, while WIT has a forward P/E of 33.29. We also note that SNX has a PEG ratio of 1.11. 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. WIT currently has a PEG ratio of 3.70.
Another notable valuation metric for SNX is its P/B ratio of 2.28. 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, WIT has a P/B of 6.85.
These are just a few of the metrics contributing to SNX's Value grade of A and WIT's Value grade of C.
SNX sticks out from WIT in both our Zacks Rank and Style Scores models, so value investors will likely feel that SNX is the better option right now.
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SYNNEX Corporation (SNX): Free Stock Analysis Report
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