Which stock currently offers the better value?

Investors interested in business and services stocks are probably familiar with APi (APG) and UL Solutions Inc. (ULS). But which of these two stocks is more attractive to value investors? To find out, we need to take a closer look at the two.

Everyone has their own methods for finding great value opportunities, but our model combines an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores evaluate companies based on specific traits.

Currently, APi has a Zacks Rank of #2 (Buy), while UL Solutions Inc. has a Zacks Rank of #3 (Hold). This system places emphasis on companies that have seen positive earnings estimate revisions, so investors should feel confident that APG’s earnings outlook is likely to improve on a larger scale. However, value investors will be interested in much more than just this.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current share price levels.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

APG currently has a forward P/E ratio of 19.54, while ULS has a forward P/E ratio of 29.67. We also note that APG has a PEG ratio of 1.07. This popular number is similar to the widely used P/E ratio, but the PEG ratio also takes into account a company’s expected EPS growth rate. ULS currently has a PEG ratio of 6.79.

Another important valuation metric for APG is its P/B ratio of 4.38. Investors use the P/B ratio to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, ULS has a P/B ratio of 12.61.

Based on these and many other metrics, APG receives a B rating, while ULS receives a C rating.

APG has seen more cost estimate revision activity and has more attractive valuation multiples than ULS, so value investors seem to be concluding that APG is the better option at this time.

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APi Group Corporation (APG): Free Stock Analysis Report

UL Solutions Inc. (ULS): Free Stock Analysis Report

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