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FLS vs. NDSN: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Flowserve (FLS - Free Report) and Nordson (NDSN - 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 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, Flowserve has a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that FLS likely has seen a stronger improvement to its earnings outlook than NDSN has recently. 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 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.

FLS currently has a forward P/E ratio of 17.55, while NDSN has a forward P/E of 23.82. We also note that FLS has a PEG ratio of 1.20. 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. NDSN currently has a PEG ratio of 1.83.

Another notable valuation metric for FLS is its P/B ratio of 3.08. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NDSN has a P/B of 4.65.

These metrics, and several others, help FLS earn a Value grade of B, while NDSN has been given a Value grade of F.

FLS has seen stronger estimate revision activity and sports more attractive valuation metrics than NDSN, so it seems like value investors will conclude that FLS is the superior option right now.


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