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AOS or ABB: Which Is the Better Value Stock Right Now?
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Investors with an interest in Manufacturing - Electronics stocks have likely encountered both A.O. Smith (AOS - Free Report) and ABB . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
A.O. Smith and ABB are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
AOS currently has a forward P/E ratio of 18.68, while ABB has a forward P/E of 22.19. We also note that AOS has a PEG ratio of 2.08. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ABB currently has a PEG ratio of 3.58.
Another notable valuation metric for AOS is its P/B ratio of 5.21. 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, ABB has a P/B of 5.56.
Based on these metrics and many more, AOS holds a Value grade of B, while ABB has a Value grade of C.
Both AOS and ABB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AOS is the superior value option right now.
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AOS or ABB: Which Is the Better Value Stock Right Now?
Investors with an interest in Manufacturing - Electronics stocks have likely encountered both A.O. Smith (AOS - Free Report) and ABB . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
A.O. Smith and ABB are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
AOS currently has a forward P/E ratio of 18.68, while ABB has a forward P/E of 22.19. We also note that AOS has a PEG ratio of 2.08. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ABB currently has a PEG ratio of 3.58.
Another notable valuation metric for AOS is its P/B ratio of 5.21. 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, ABB has a P/B of 5.56.
Based on these metrics and many more, AOS holds a Value grade of B, while ABB has a Value grade of C.
Both AOS and ABB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AOS is the superior value option right now.