ACN or JKHY: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Computers - IT Services sector have probably already heard of Accenture (ACN) and Jack Henry (JKHY). 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Accenture and Jack Henry are holding a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ACN currently has a forward P/E ratio of 15.14, while JKHY has a forward P/E of 25.60. We also note that ACN has a PEG ratio of 2.02. 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. JKHY currently has a PEG ratio of 2.56.

Another notable valuation metric for ACN is its P/B ratio of 4.05. 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, JKHY has a P/B of 5.52.

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

Both ACN and JKHY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ACN 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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