BAESY vs. HEI: Which Stock Is the Better Value Option?
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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Bae Systems PLC and Heico Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BAESY has an improving earnings outlook. But this is only part of the picture 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.
BAESY currently has a forward P/E ratio of 17.14, while HEI has a forward P/E of 56.94. We also note that BAESY has a PEG ratio of 1.25. 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 4.38.
Another notable valuation metric for BAESY is its P/B ratio of 2.71. 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 7.97.
These metrics, and several others, help BAESY earn a Value grade of A, while HEI has been given a 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
