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ENS vs. FELE: Which Stock Is the Better Value Option?

Zacks Equity Research
Texas Capital (TCBI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors with an interest in Manufacturing - Electronics stocks have likely encountered both EnerSys (ENS) and Franklin Electric (FELE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

EnerSys has a Zacks Rank of #1 (Strong Buy), while Franklin Electric has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that ENS likely has seen a stronger improvement to its earnings outlook than FELE has recently. 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 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.

ENS currently has a forward P/E ratio of 14.58, while FELE has a forward P/E of 17.91. We also note that ENS has a PEG ratio of 1.46. 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. FELE currently has a PEG ratio of 2.11.

Another notable valuation metric for ENS is its P/B ratio of 2.64. 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, FELE has a P/B of 2.66.

Based on these metrics and many more, ENS holds a Value grade of B, while FELE has a Value grade of C.

ENS sticks out from FELE in both our Zacks Rank and Style Scores models, so value investors will likely feel that ENS is the better option right now.


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Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report
 
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