CACI or GIB: Which Is the Better Value Stock Right Now?
Investors interested in Computer - Services stocks are likely familiar with CACI International (CACI) and CGI Group (GIB). 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
CACI International has a Zacks Rank of #2 (Buy), while CGI Group has a Zacks Rank of #3 (Hold) right now. This means that CACI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
CACI currently has a forward P/E ratio of 18.14, while GIB has a forward P/E of 18.48. We also note that CACI has a PEG ratio of 1.83. 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. GIB currently has a PEG ratio of 1.95.
Another notable valuation metric for CACI is its P/B ratio of 2.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GIB has a P/B of 3.88.
These are just a few of the metrics contributing to CACI's Value grade of B and GIB's Value grade of C.
CACI 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 CACI is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CACI International, Inc. (CACI) : Free Stock Analysis Report
CGI Group, Inc. (GIB) : Free Stock Analysis Report
