Investors interested in Computer - Networking stocks are likely familiar with Digi International (DGII) and Cisco Systems (CSCO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Currently, both Digi International and Cisco Systems are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

DGII currently has a forward P/E ratio of 14.75, while CSCO has a forward P/E of 17.25. We also note that DGII has a PEG ratio of 0.87. 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. CSCO currently has a PEG ratio of 3.38.

Another notable valuation metric for DGII is its P/B ratio of 1.83. 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, CSCO has a P/B of 5.59.

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

Both DGII and CSCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DGII is the superior value option right now.

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Digi International Inc. (DGII) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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