AZZ vs. ABBNY: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - Electronics stocks are likely familiar with AZZ (AZZ) and ABB (ABBNY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
AZZ and ABB are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AZZ has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
AZZ currently has a forward P/E ratio of 14.52, while ABBNY has a forward P/E of 20.65. We also note that AZZ has a PEG ratio of 1.04. 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. ABBNY currently has a PEG ratio of 3.33.
Another notable valuation metric for AZZ is its P/B ratio of 1.70. 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 5.82.
Based on these metrics and many more, AZZ holds a Value grade of A, while ABBNY has a Value grade of C.
AZZ stands above ABBNY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AZZ is the superior value option right now.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
ABB Ltd (ABBNY) : Free Stock Analysis Report
