CFX or GTLS: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Colfax (CFX) or Chart Industries (GTLS). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Colfax has a Zacks Rank of #2 (Buy), while Chart Industries has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CFX has an improving earnings outlook. But this is only part of the picture 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CFX currently has a forward P/E ratio of 7.83, while GTLS has a forward P/E of 24.74. We also note that CFX has a PEG ratio of 0.56. 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. GTLS currently has a PEG ratio of 0.86.
Another notable valuation metric for CFX is its P/B ratio of 0.70. 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, GTLS has a P/B of 2.52.
These metrics, and several others, help CFX earn a Value grade of A, while GTLS has been given a Value grade of D.
CFX stands above GTLS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CFX is the superior value option right now.
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