BAESY or HEI: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Aerospace - Defense Equipment sector might want to consider either Bae Systems PLC (BAESY) or Heico Corporation (HEI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Bae Systems PLC and Heico Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAESY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 15.88, while HEI has a forward P/E of 55.28. We also note that BAESY has a PEG ratio of 1.13. 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. HEI currently has a PEG ratio of 4.25.
Another notable valuation metric for BAESY is its P/B ratio of 2.73. 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 7.46.
These are just a few of the metrics contributing to BAESY's Value grade of A 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
