Investors interested in stocks from the Diversified Operations sector have probably already heard of 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Carlisle has a Zacks Rank of #1 (Strong Buy), while 3M has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CSL 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CSL currently has a forward P/E ratio of 16.77, while MMM has a forward P/E of 20.45. We also note that CSL has a PEG ratio of 1.12. 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. MMM currently has a PEG ratio of 2.01.
Another notable valuation metric for CSL is its P/B ratio of 2.84. 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, MMM has a P/B of 12.71.
Based on these metrics and many more, CSL holds a Value grade of B, while MMM has a Value grade of D.
CSL stands above MMM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CSL is 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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