CIB vs. ITT: Which Stock Should Value Investors Buy Now?

Investors interested in Diversified Operations stocks are likely familiar with Grupo Cibest (CIB) and ITT (ITT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Grupo Cibest has a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CIB has an improving earnings outlook. However, value investors will care about much more than just this.

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.

CIB currently has a forward P/E ratio of 9.10, while ITT has a forward P/E of 24.22. We also note that CIB has a PEG ratio of 0.91. 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. ITT currently has a PEG ratio of 1.92.

Another notable valuation metric for CIB is its P/B ratio of 2.03. 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, ITT has a P/B of 5.28.

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

CIB 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 CIB is likely the superior value option right now.

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

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