Investors interested in Technology Services stocks are likely familiar with Smiths Group PLC (SMGZY) and MeridianLink (MLNK). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Smiths Group PLC is sporting a Zacks Rank of #2 (Buy), while MeridianLink has a Zacks Rank of #3 (Hold). This means that SMGZY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SMGZY currently has a forward P/E ratio of 16.83, while MLNK has a forward P/E of 52.11. We also note that SMGZY has a PEG ratio of 1.55. 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. MLNK currently has a PEG ratio of 1.76.

Another notable valuation metric for SMGZY is its P/B ratio of 3.13. 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, MLNK has a P/B of 3.31.

Based on these metrics and many more, SMGZY holds a Value grade of B, while MLNK has a Value grade of F.

SMGZY stands above MLNK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SMGZY is the superior value option right now.

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

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