New Zealand markets close in 3 hours 20 minutes
  • NZX 50

    11,720.10
    -33.38 (-0.28%)
     
  • NZD/USD

    0.6289
    -0.0000 (-0.01%)
     
  • NZD/EUR

    0.6153
    -0.0001 (-0.01%)
     
  • ALL ORDS

    7,264.20
    -14.40 (-0.20%)
     
  • ASX 200

    7,017.30
    -12.50 (-0.18%)
     
  • OIL

    90.39
    -0.11 (-0.12%)
     
  • GOLD

    1,808.20
    -4.10 (-0.23%)
     
  • NASDAQ

    13,008.17
    -151.00 (-1.15%)
     
  • FTSE

    7,488.15
    +5.78 (+0.08%)
     
  • Dow Jones

    32,774.41
    -58.13 (-0.18%)
     
  • DAX

    13,534.97
    -152.72 (-1.12%)
     
  • Hang Seng

    19,956.51
    -46.93 (-0.23%)
     
  • NIKKEI 225

    27,865.59
    -134.37 (-0.48%)
     
  • NZD/JPY

    84.9630
    +0.0300 (+0.04%)
     

DOX vs. EPAM: Which Stock Is the Better Value Option?

·2-min read

Investors interested in Computers - IT Services stocks are likely familiar with Amdocs (DOX) and Epam (EPAM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Amdocs is sporting a Zacks Rank of #2 (Buy), while Epam 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 EPAM has recently. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

DOX currently has a forward P/E ratio of 16.47, while EPAM has a forward P/E of 39.48. We also note that DOX has a PEG ratio of 1.65. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EPAM currently has a PEG ratio of 2.30.

Another notable valuation metric for DOX is its P/B ratio of 3.14. 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, EPAM has a P/B of 7.65.

These are just a few of the metrics contributing to DOX's Value grade of B and EPAM's Value grade of D.

DOX has seen stronger estimate revision activity and sports more attractive valuation metrics than EPAM, so it seems like value investors will conclude that DOX is the superior 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
 
EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting