FLEX vs. GRMN: Which Stock Is the Better Value Option?
Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Flex (FLEX) and Garmin (GRMN). 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Flex has a Zacks Rank of #2 (Buy), while Garmin has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that FLEX likely has seen a stronger improvement to its earnings outlook than GRMN has recently. However, value investors will care about much more than just this.
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.
FLEX currently has a forward P/E ratio of 10.71, while GRMN has a forward P/E of 20.03. We also note that FLEX has a PEG ratio of 0.94. 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. GRMN currently has a PEG ratio of 3.58.
Another notable valuation metric for FLEX is its P/B ratio of 2.02. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GRMN has a P/B of 3.23.
Based on these metrics and many more, FLEX holds a Value grade of A, while GRMN has a Value grade of D.
FLEX 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 FLEX is likely 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
Flex Ltd. (FLEX) : Free Stock Analysis Report
Garmin Ltd. (GRMN) : Free Stock Analysis Report
