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CR vs. HON: Which Stock Is the Better Value Option?

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·2 min read
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  • HON
  • CR

Investors with an interest in Diversified Operations stocks have likely encountered both Crane (CR) and Honeywell International Inc. (HON). 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, Crane has a Zacks Rank of #2 (Buy), while Honeywell International Inc. 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 CR has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CR currently has a forward P/E ratio of 16, while HON has a forward P/E of 27.08. We also note that CR has a PEG ratio of 0.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HON currently has a PEG ratio of 2.53.

Another notable valuation metric for CR is its P/B ratio of 3.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HON has a P/B of 8.30.

These are just a few of the metrics contributing to CR's Value grade of B and HON's Value grade of C.

CR stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CR is the superior value option right now.


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Crane Co. (CR) : Free Stock Analysis Report
 
Honeywell International Inc. (HON) : Free Stock Analysis Report
 
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