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FERG vs. ITW: Which Stock Should Value Investors Buy Now?
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Investors interested in Manufacturing - General Industrial stocks are likely familiar with Wolseley PLC (FERG - Free Report) and Illinois Tool Works (ITW - Free Report) . 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.
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 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, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FERG is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FERG currently has a forward P/E ratio of 15.62, while ITW has a forward P/E of 22.68. We also note that FERG has a PEG ratio of 1.14. 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 2.31.
Another notable valuation metric for FERG is its P/B ratio of 6.43. 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 17.88.
Based on these metrics and many more, FERG holds a Value grade of B, while ITW has a Value grade of C.
FERG 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 FERG is likely the superior value option right now.
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FERG vs. ITW: Which Stock Should Value Investors Buy Now?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Wolseley PLC (FERG - Free Report) and Illinois Tool Works (ITW - Free Report) . 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.
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 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, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FERG is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FERG currently has a forward P/E ratio of 15.62, while ITW has a forward P/E of 22.68. We also note that FERG has a PEG ratio of 1.14. 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 2.31.
Another notable valuation metric for FERG is its P/B ratio of 6.43. 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 17.88.
Based on these metrics and many more, FERG holds a Value grade of B, while ITW has a Value grade of C.
FERG 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 FERG is likely the superior value option right now.