FUTU vs. SPXC: Which Stock Is the Better Value Option?

Investors looking for stocks in the Technology Services sector might want to consider either Futu Holdings Limited Sponsored ADR (FUTU) or SPX Technologies (SPXC). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Currently, Futu Holdings Limited Sponsored ADR has a Zacks Rank of #1 (Strong Buy), while SPX Technologies has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that FUTU likely has seen a stronger improvement to its earnings outlook than SPXC 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.

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.

FUTU currently has a forward P/E ratio of 21.23, while SPXC has a forward P/E of 28.65. We also note that FUTU has a PEG ratio of 1.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SPXC currently has a PEG ratio of 1.59.

Another notable valuation metric for FUTU is its P/B ratio of 5.39. 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, SPXC has a P/B of 5.87.

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

FUTU stands above SPXC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FUTU is the superior value option right now.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research