Investors looking for stocks in the Consulting Services sector might want to consider either Information Services Group (III) or NV5 Holdings (NVEE). 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.
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 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.
Right now, Information Services Group is sporting a Zacks Rank of #2 (Buy), while NV5 Holdings has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that III is likely seeing its earnings outlook improve to a greater extent. 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.
III currently has a forward P/E ratio of 10.91, while NVEE has a forward P/E of 19.79. We also note that III has a PEG ratio of 0.78. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NVEE currently has a PEG ratio of 1.06.
Another notable valuation metric for III is its P/B ratio of 2.55. 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, NVEE has a P/B of 3.24.
These metrics, and several others, help III earn a Value grade of A, while NVEE has been given a Value grade of C.
III 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 III is likely the superior value option right now.
Information Services Group, Inc. (III): Free Stock Analysis Report
NV5 Global, Inc. (NVEE): Free Stock Analysis Report
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Zacks Investment Research