DXPE or FLS: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either DXP Enterprises (DXPE) or Flowserve (FLS). 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.
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.
DXP Enterprises and Flowserve are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DXPE is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
DXPE currently has a forward P/E ratio of 18.40, while FLS has a forward P/E of 23.15. We also note that DXPE has a PEG ratio of 1.05. 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. FLS currently has a PEG ratio of 1.49.
Another notable valuation metric for DXPE is its P/B ratio of 2.50. 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, FLS has a P/B of 3.91.
Based on these metrics and many more, DXPE holds a Value grade of B, while FLS has a Value grade of C.
DXPE stands above FLS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DXPE is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DXP Enterprises, Inc. (DXPE) : Free Stock Analysis Report
Flowserve Corporation (FLS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
