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MARUY vs. HON: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Diversified Operations sector have probably already heard of Marubeni Corp. (MARUY - Free Report) and Honeywell International Inc. (HON - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Marubeni Corp. is sporting a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that MARUY likely has seen a stronger improvement to its earnings outlook than HON has recently. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MARUY currently has a forward P/E ratio of 4.86, while HON has a forward P/E of 23.77. We also note that MARUY has a PEG ratio of 0.57. 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. HON currently has a PEG ratio of 2.66.

Another notable valuation metric for MARUY is its P/B ratio of 0.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HON has a P/B of 7.95.

These metrics, and several others, help MARUY earn a Value grade of A, while HON has been given a Value grade of D.

MARUY sticks out from HON in both our Zacks Rank and Style Scores models, so value investors will likely feel that MARUY is the better option right now.


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