Investors with an interest in Diversified Operations stocks have likely encountered both Grupo Cibest (CIB) and ITT (ITT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Grupo Cibest has a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that CIB likely has seen a stronger improvement to its earnings outlook than ITT has recently. 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.
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.
CIB currently has a forward P/E ratio of 9.25, while ITT has a forward P/E of 24.77. We also note that CIB has a PEG ratio of 0.77. 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. ITT currently has a PEG ratio of 1.67.
Another notable valuation metric for CIB is its P/B ratio of 2.02. 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, ITT has a P/B of 3.8.
These metrics, and several others, help CIB earn a Value grade of B, while ITT has been given a Value grade of D.
CIB stands above ITT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIB is the superior value option right now.
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Grupo Cibest S.A. - Sponsored ADR (CIB): Free Stock Analysis Report
ITT Inc. (ITT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).