BWMN vs. TRI: Which Stock Is the Better Value Option?

Investors with an interest in Business - Services stocks have likely encountered both Bowman Consulting (BWMN) and Thomson Reuters (TRI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Bowman Consulting and Thomson Reuters are holding a Zacks Rank of # 2 (Buy). 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 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BWMN currently has a forward P/E ratio of 27.94, while TRI has a forward P/E of 47.73. We also note that BWMN has a PEG ratio of 1.62. 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. TRI currently has a PEG ratio of 5.78.

Another notable valuation metric for BWMN is its P/B ratio of 1.76. 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, TRI has a P/B of 6.86.

These are just a few of the metrics contributing to BWMN's Value grade of B and TRI's Value grade of F.

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