B vs. NDSN: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Barnes Group (B) and Nordson (NDSN). But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Barnes Group is sporting a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that B likely has seen a stronger improvement to its earnings outlook than NDSN has recently. But this is just one factor that value investors are interested in.
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 18.76, while NDSN has a forward P/E of 26.97. We also note that B has a PEG ratio of 1.88. 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. NDSN currently has a PEG ratio of 2.07.
Another notable valuation metric for B is its P/B ratio of 1.51. 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, NDSN has a P/B of 5.58.
Based on these metrics and many more, B holds a Value grade of B, while NDSN has a Value grade of D.
B is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that B is likely the superior value option right now.
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Barnes Group, Inc. (B) : Free Stock Analysis Report
Nordson Corporation (NDSN) : Free Stock Analysis Report
