AZZ or ZWS: Which Is the Better Value Stock Right Now?
Investors with an interest in Manufacturing - Electronics stocks have likely encountered both AZZ (AZZ) and Zurn Water (ZWS). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, AZZ has a Zacks Rank of #1 (Strong Buy), while Zurn Water has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AZZ is likely seeing its earnings outlook improve to a greater extent. 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 13.71, while ZWS has a forward P/E of 25.31. We also note that AZZ has a PEG ratio of 0.98. 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. ZWS currently has a PEG ratio of 1.78.
Another notable valuation metric for AZZ is its P/B ratio of 1.57. 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, ZWS has a P/B of 3.
These metrics, and several others, help AZZ earn a Value grade of A, while ZWS has been given a Value grade of C.
AZZ sticks out from ZWS in both our Zacks Rank and Style Scores models, so value investors will likely feel that AZZ is the better option right now.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
Zurn Elkay Water Solutions Cor (ZWS) : Free Stock Analysis Report
