CVGI or GNTX: Which Is the Better Value Stock Right Now?
Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Commercial Vehicle Group (CVGI) and Gentex (GNTX). But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Right now, both Commercial Vehicle Group and Gentex are sporting a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.
CVGI currently has a forward P/E ratio of 8.76, while GNTX has a forward P/E of 18.16. We also note that CVGI has a PEG ratio of 0.40. 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. GNTX currently has a PEG ratio of 0.79.
Another notable valuation metric for CVGI is its P/B ratio of 2.11. 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, GNTX has a P/B of 3.40.
These metrics, and several others, help CVGI earn a Value grade of A, while GNTX has been given a Value grade of C.
Both CVGI and GNTX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CVGI is the superior value option right now.
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Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report
Gentex Corporation (GNTX) : Free Stock Analysis Report
