PERI vs. RELX: Which Stock Is the Better Value Option?

Investors interested in Internet - Content stocks are likely familiar with Perion Network (PERI) and RELX PLC (RELX). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Perion Network and RELX PLC have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

PERI currently has a forward P/E ratio of 8.02, while RELX has a forward P/E of 30.01. We also note that PERI has a PEG ratio of 0.36. 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. RELX currently has a PEG ratio of 2.93.

Another notable valuation metric for PERI is its P/B ratio of 0.54. 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, RELX has a P/B of 20.95.

These are just a few of the metrics contributing to PERI's Value grade of B and RELX's Value grade of D.

Both PERI and RELX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PERI is the superior value option right now.

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

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