Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Applied Industrial Technologies (AIT) or Idex (IEX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Applied Industrial Technologies has a Zacks Rank of #1 (Strong Buy), while Idex has a Zacks Rank of #2 (Buy) right now. This means that AIT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
AIT currently has a forward P/E ratio of 20.49, while IEX has a forward P/E of 27.66. We also note that AIT has a PEG ratio of 1.71. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IEX currently has a PEG ratio of 2.51.
Another notable valuation metric for AIT is its P/B ratio of 3.62. 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, IEX has a P/B of 5.45.
These are just a few of the metrics contributing to AIT's Value grade of B and IEX's Value grade of D.
AIT stands above IEX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AIT is the superior value option right now.
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
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