Investors with an interest in Consulting Services stocks have likely encountered both Hackett Group (HCKT) and Equifax (EFX). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Hackett Group has a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that HCKT likely has seen a stronger improvement to its earnings outlook than EFX has recently. But this is just one piece of the puzzle for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HCKT currently has a forward P/E ratio of 10.83, while EFX has a forward P/E of 23.71. We also note that HCKT has a PEG ratio of 0.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EFX currently has a PEG ratio of 2.08.
Another notable valuation metric for HCKT is its P/B ratio of 5.04. 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, EFX has a P/B of 5.07.
Based on these metrics and many more, HCKT holds a Value grade of A, while EFX has a Value grade of C.
HCKT has seen stronger estimate revision activity and sports more attractive valuation metrics than EFX, so it seems like value investors will conclude that HCKT is the superior option right now.
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The Hackett Group, Inc. (HCKT): Free Stock Analysis Report Equifax, Inc. (EFX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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