AZZ or ABBNY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of AZZ (AZZ) and ABB (ABBNY). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, AZZ has a Zacks Rank of #2 (Buy), while ABB has a Zacks Rank of #4 (Sell). This means that AZZ'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.
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.
AZZ currently has a forward P/E ratio of 15.90, while ABBNY has a forward P/E of 20.73. We also note that AZZ has a PEG ratio of 1.14. 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. ABBNY currently has a PEG ratio of 3.34.
Another notable valuation metric for AZZ is its P/B ratio of 1.86. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ABBNY has a P/B of 5.75.
These are just a few of the metrics contributing to AZZ's Value grade of A and ABBNY's Value grade of C.
AZZ has seen stronger estimate revision activity and sports more attractive valuation metrics than ABBNY, so it seems like value investors will conclude that AZZ is the superior option right now.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
ABB Ltd (ABBNY) : Free Stock Analysis Report
