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FERG vs. ITW: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Wolseley PLC (FERG - Free Report) or Illinois Tool Works (ITW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FERG has an improving earnings outlook. But this is just one piece of the puzzle 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.
FERG currently has a forward P/E ratio of 15.09, while ITW has a forward P/E of 23.02. We also note that FERG has a PEG ratio of 1.10. 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. ITW currently has a PEG ratio of 2.35.
Another notable valuation metric for FERG is its P/B ratio of 6.22. 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, ITW has a P/B of 18.19.
These are just a few of the metrics contributing to FERG's Value grade of B and ITW's Value grade of C.
FERG stands above ITW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FERG is the superior value option right now.
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FERG vs. ITW: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Wolseley PLC (FERG - Free Report) or Illinois Tool Works (ITW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FERG has an improving earnings outlook. But this is just one piece of the puzzle 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.
FERG currently has a forward P/E ratio of 15.09, while ITW has a forward P/E of 23.02. We also note that FERG has a PEG ratio of 1.10. 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. ITW currently has a PEG ratio of 2.35.
Another notable valuation metric for FERG is its P/B ratio of 6.22. 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, ITW has a P/B of 18.19.
These are just a few of the metrics contributing to FERG's Value grade of B and ITW's Value grade of C.
FERG stands above ITW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FERG is the superior value option right now.