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FLS or NDSN: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Flowserve (FLS - Free Report) and Nordson (NDSN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Right now, Flowserve is sporting a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #3 (Hold). This means that FLS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 16.60, while NDSN has a forward P/E of 24.75. We also note that FLS has a PEG ratio of 1.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NDSN currently has a PEG ratio of 1.90.

Another notable valuation metric for FLS is its P/B ratio of 2.96. 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, NDSN has a P/B of 4.84.

These are just a few of the metrics contributing to FLS's Value grade of B and NDSN's Value grade of D.

FLS 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 FLS is likely the superior value option right now.


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