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Investors interested in Engineering - R and D Services stocks are likely familiar with Babcock International Group PLC (BCKIY) and Howmet (HWM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Babcock International Group PLC has a Zacks Rank of #2 (Buy), while Howmet has a Zacks Rank of #3 (Hold) right now. This means that BCKIY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

BCKIY currently has a forward P/E ratio of 12.81, while HWM has a forward P/E of 33. We also note that BCKIY has a PEG ratio of 0.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HWM currently has a PEG ratio of 1.43.

Another notable valuation metric for BCKIY is its P/B ratio of 7.54. 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, HWM has a P/B of 7.99.

Based on these metrics and many more, BCKIY holds a Value grade of B, while HWM has a Value grade of D.

BCKIY 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 BCKIY is likely the superior value option right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.