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BCKIY vs. SPXSF: Which Stock Should Value Investors Buy Now?

Investors looking for stocks in the Engineering - R and D Services sector might want to consider either Babcock International Group PLC (BCKIY) or SPIRAX SARCO (SPXSF). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Babcock International Group PLC and SPIRAX SARCO are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BCKIY likely has seen a stronger improvement to its earnings outlook than SPXSF has recently. However, value investors will care about much more than just this.

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.

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.

BCKIY currently has a forward P/E ratio of 8.39, while SPXSF has a forward P/E of 33.08. We also note that BCKIY has a PEG ratio of 2.10. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SPXSF currently has a PEG ratio of 4.14.

Another notable valuation metric for BCKIY is its P/B ratio of 1.12. 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, SPXSF has a P/B of 8.64.

These metrics, and several others, help BCKIY earn a Value grade of A, while SPXSF has been given a Value grade of F.

BCKIY stands above SPXSF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BCKIY is the superior value option right now.


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SPIRAX SARCO (SPXSF): Free Stock Analysis Report
 
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