BAESY or HEI: Which Is the Better Value Stock Right Now?
Investors interested in Aerospace - Defense Equipment stocks are likely familiar with Bae Systems PLC (BAESY) and Heico Corporation (HEI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, Bae Systems PLC has a Zacks Rank of #1 (Strong Buy), while Heico Corporation has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BAESY likely has seen a stronger improvement to its earnings outlook than HEI has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
BAESY currently has a forward P/E ratio of 17.08, while HEI has a forward P/E of 56. We also note that BAESY has a PEG ratio of 1.22. 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. HEI currently has a PEG ratio of 4.01.
Another notable valuation metric for BAESY is its P/B ratio of 2.94. 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, HEI has a P/B of 7.44.
These are just a few of the metrics contributing to BAESY's Value grade of B and HEI's Value grade of D.
BAESY stands above HEI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BAESY is the superior value option right now.
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Bae Systems PLC (BAESY) : Free Stock Analysis Report
Heico Corporation (HEI) : Free Stock Analysis Report
