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AGCO vs. DE: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Manufacturing - Farm Equipment sector might want to consider either Agco (AGCO) or Deere (DE). 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Agco and Deere are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AGCO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AGCO currently has a forward P/E ratio of 19.78, while DE has a forward P/E of 30.20. We also note that AGCO has a PEG ratio of 2.28. 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. DE currently has a PEG ratio of 3.69.

Another notable valuation metric for AGCO is its P/B ratio of 2.15. 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, DE has a P/B of 5.55.

Based on these metrics and many more, AGCO holds a Value grade of B, while DE has a Value grade of C.

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


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AGCO Corporation (AGCO) : Free Stock Analysis Report
 
Deere Company (DE) : Free Stock Analysis Report
 
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