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EMR vs. ETN: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Emerson Electric (EMR - Free Report) or Eaton (ETN - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Emerson Electric and Eaton are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
EMR currently has a forward P/E ratio of 18.10, while ETN has a forward P/E of 23.89. We also note that EMR has a PEG ratio of 1.64. 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. ETN currently has a PEG ratio of 2.08.
Another notable valuation metric for EMR is its P/B ratio of 2.07. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ETN has a P/B of 5.18.
These are just a few of the metrics contributing to EMR's Value grade of B and ETN's Value grade of C.
Both EMR and ETN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EMR is the superior value option right now.
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EMR vs. ETN: Which Stock Is the Better Value Option?
Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Emerson Electric (EMR - Free Report) or Eaton (ETN - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Emerson Electric and Eaton are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
EMR currently has a forward P/E ratio of 18.10, while ETN has a forward P/E of 23.89. We also note that EMR has a PEG ratio of 1.64. 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. ETN currently has a PEG ratio of 2.08.
Another notable valuation metric for EMR is its P/B ratio of 2.07. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ETN has a P/B of 5.18.
These are just a few of the metrics contributing to EMR's Value grade of B and ETN's Value grade of C.
Both EMR and ETN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EMR is the superior value option right now.