We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NOC vs. LHX: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors interested in Aerospace - Defense stocks are likely familiar with Northrop Grumman (NOC - Free Report) and Harris (LHX - 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.
Northrop Grumman and Harris are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NOC likely has seen a stronger improvement to its earnings outlook than LHX has recently. 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 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.
NOC currently has a forward P/E ratio of 17.21, while LHX has a forward P/E of 20.98. We also note that NOC has a PEG ratio of 1.31. 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. LHX currently has a PEG ratio of 2.62.
Another notable valuation metric for NOC is its P/B ratio of 6.01. 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, LHX has a P/B of 7.13.
These metrics, and several others, help NOC earn a Value grade of B, while LHX has been given a Value grade of D.
NOC 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 NOC is likely the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NOC vs. LHX: Which Stock Should Value Investors Buy Now?
Investors interested in Aerospace - Defense stocks are likely familiar with Northrop Grumman (NOC - Free Report) and Harris (LHX - 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.
Northrop Grumman and Harris are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NOC likely has seen a stronger improvement to its earnings outlook than LHX has recently. 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 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.
NOC currently has a forward P/E ratio of 17.21, while LHX has a forward P/E of 20.98. We also note that NOC has a PEG ratio of 1.31. 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. LHX currently has a PEG ratio of 2.62.
Another notable valuation metric for NOC is its P/B ratio of 6.01. 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, LHX has a P/B of 7.13.
These metrics, and several others, help NOC earn a Value grade of B, while LHX has been given a Value grade of D.
NOC 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 NOC is likely the superior value option right now.