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JCI vs. AAXN: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in Security and Safety Services stocks are likely familiar with Johnson Controls (JCI) and Axon Enterprise (AAXN). 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 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.

Johnson Controls and Axon Enterprise are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JCI has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 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.

JCI currently has a forward P/E ratio of 21.45, while AAXN has a forward P/E of 59.07. We also note that JCI has a PEG ratio of 2.22. 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. AAXN currently has a PEG ratio of 2.36.

Another notable valuation metric for JCI is its P/B ratio of 1.54. 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, AAXN has a P/B of 6.95.

These are just a few of the metrics contributing to JCI's Value grade of B and AAXN's Value grade of F.

JCI sticks out from AAXN in both our Zacks Rank and Style Scores models, so value investors will likely feel that JCI is the better option right now.

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Johnson Controls International plc (JCI) : Free Stock Analysis Report
Axon Enterprise, Inc (AAXN) : Free Stock Analysis Report
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