Investors with an interest in Industrial Services stocks have likely encountered both ScanSource (SCSC) and W.W. Grainger (GWW). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, ScanSource has a Zacks Rank of #2 (Buy), while W.W. Grainger has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SCSC likely has seen a stronger improvement to its earnings outlook than GWW has recently. 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.

SCSC currently has a forward P/E ratio of 16.05, while GWW has a forward P/E of 30.90. We also note that SCSC has a PEG ratio of 1.60. 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. GWW currently has a PEG ratio of 3.32.

Another notable valuation metric for SCSC is its P/B ratio of 1.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GWW has a P/B of 15.19.

These are just a few of the metrics contributing to SCSC's Value grade of A and GWW's Value grade of C.

SCSC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SCSC is likely the superior value option right now.

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ScanSource, Inc. (SCSC) : Free Stock Analysis Report

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