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BAESY or HEI: Which Is the Better Value Stock Right Now?

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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 offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Bae Systems PLC is sporting a Zacks Rank of #2 (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 factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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 12.12, while HEI has a forward P/E of 54.16. We also note that BAESY has a PEG ratio of 3.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HEI currently has a PEG ratio of 4.50.

Another notable valuation metric for BAESY is its P/B ratio of 2.65. 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, HEI has a P/B of 8.20.

Based on these metrics and many more, BAESY holds a Value grade of A, while HEI has a Value grade of D.

BAESY has seen stronger estimate revision activity and sports more attractive valuation metrics than HEI, so it seems like value investors will conclude that BAESY is the superior option right now.


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Heico Corporation (HEI) : Free Stock Analysis Report
 
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