Investors with an interest in Diversified Operations stocks have likely encountered both Carlisle (CSL) and 3M (MMM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Carlisle has a Zacks Rank of #2 (Buy), while 3M has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CSL likely has seen a stronger improvement to its earnings outlook than MMM has recently. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
CSL currently has a forward P/E ratio of 17.35, while MMM has a forward P/E of 17.40. We also note that CSL has a PEG ratio of 1.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MMM currently has a PEG ratio of 1.83.
Another notable valuation metric for CSL is its P/B ratio of 3.09. 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, MMM has a P/B of 9.16.
These metrics, and several others, help CSL earn a Value grade of B, while MMM has been given a Value grade of C.
CSL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CSL is likely the superior value option right now.
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Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
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