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GRC or CR: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Gorman-Rupp (GRC - Free Report) or Crane (CR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Gorman-Rupp and Crane are both sporting a Zacks Rank of # 2 (Buy) right now. 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. However, value investors will care about much more than just this.

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.

GRC currently has a forward P/E ratio of 20.25, while CR has a forward P/E of 29.79. We also note that GRC has a PEG ratio of 1.56. 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. CR currently has a PEG ratio of 2.28.

Another notable valuation metric for GRC is its P/B ratio of 2.74. 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, CR has a P/B of 5.85.

These metrics, and several others, help GRC earn a Value grade of B, while CR has been given a Value grade of D.

Both GRC and CR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GRC is the superior value option right now.


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