RKT or TRI: Which Is the Better Value Stock Right Now?
RKT vs. TRI: Which Stock Is the Better Value Option?
Investors interested in stocks from the Technology Services sector have probably already heard of Rocket Companies (RKT) and Thomson Reuters (TRI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Rocket Companies is sporting a Zacks Rank of #1 (Strong Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RKT has an improving earnings 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
RKT currently has a forward P/E ratio of 6.74, while TRI has a forward P/E of 60.08. We also note that RKT has a PEG ratio of 0.67. 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. TRI currently has a PEG ratio of 7.51.
Another notable valuation metric for RKT is its P/B ratio of 3.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TRI has a P/B of 4.16.
These metrics, and several others, help RKT earn a Value grade of B, while TRI has been given a Value grade of C.
RKT stands above TRI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RKT is the superior value option right now.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Rocket Companies, Inc. (RKT): Free Stock Analysis Report
Thomson Reuters Corp (TRI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research