Investors interested in Security and Safety Services stocks are likely familiar with Brady (BRC) and HALMA PLC (HLMAF). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Brady has a Zacks Rank of #2 (Buy), while HALMA PLC has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRC 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 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.
BRC currently has a forward P/E ratio of 20.38, while HLMAF has a forward P/E of 38.72. We also note that BRC has a PEG ratio of 2.72. 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. HLMAF currently has a PEG ratio of 3.52.
Another notable valuation metric for BRC is its P/B ratio of 3.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HLMAF has a P/B of 7.82.
These metrics, and several others, help BRC earn a Value grade of B, while HLMAF has been given a Value grade of D.
BRC has seen stronger estimate revision activity and sports more attractive valuation metrics than HLMAF, so it seems like value investors will conclude that BRC is the superior option right now.
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Brady Corporation (BRC) : Free Stock Analysis Report
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