Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Barnes Group (B) and Idex (IEX). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Barnes Group and Idex are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
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.
B currently has a forward P/E ratio of 18.91, while IEX has a forward P/E of 28.23. We also note that B has a PEG ratio of 1.89. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IEX currently has a PEG ratio of 2.82.
Another notable valuation metric for B is its P/B ratio of 2.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IEX has a P/B of 5.97.
These metrics, and several others, help B earn a Value grade of B, while IEX has been given a Value grade of D.
Both B and IEX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that B is the superior value option right now.
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Barnes Group, Inc. (B) : Free Stock Analysis Report
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