Yahoo Finance DOX or DT: Which Is the Better Value Stock Right Now?
Investors interested in Computers - IT Services stocks are likely familiar with Amdocs (DOX) and Dynatrace (DT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Amdocs has a Zacks Rank of #2 (Buy), while Dynatrace has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that DOX likely has seen a stronger improvement to its earnings outlook than DT has recently. But this is only part of the picture for value investors.
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 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.
DOX currently has a forward P/E ratio of 13.28, while DT has a forward P/E of 35.49. We also note that DOX has a PEG ratio of 1.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DT currently has a PEG ratio of 2.23.
Another notable valuation metric for DOX is its P/B ratio of 2.83. 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, DT has a P/B of 7.19.
These are just a few of the metrics contributing to DOX's Value grade of B and DT's Value grade of F.
DOX stands above DT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DOX is 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
Amdocs Limited (DOX) : Free Stock Analysis Report
Dynatrace, Inc. (DT) : Free Stock Analysis Report
