PERI vs. RELX: Which Stock Is the Better Value Option?

Investors interested in stocks from the Internet - Content sector have probably already heard of Perion Network (PERI) and RELX PLC (RELX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Perion Network and RELX PLC have a Zacks Rank of #2 (Buy) right now. 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 factor that value investors are interested in.

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 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.

PERI currently has a forward P/E ratio of 7.64, while RELX has a forward P/E of 17.98. We also note that PERI has a PEG ratio of 0.40. 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. RELX currently has a PEG ratio of 1.52.

Another notable valuation metric for PERI is its P/B ratio of 0.56. 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, RELX has a P/B of 36.16.

These metrics, and several others, help PERI earn a Value grade of A, while RELX has been given a Value grade of C.

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