FLS or IR: Which Is the Better Value Stock Right Now?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Flowserve (FLS) and Ingersoll Rand (IR). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Flowserve has a Zacks Rank of #2 (Buy), while Ingersoll Rand has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FLS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
FLS currently has a forward P/E ratio of 19.77, while IR has a forward P/E of 23.81. We also note that FLS has a PEG ratio of 0.86. 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. IR currently has a PEG ratio of 2.13.
Another notable valuation metric for FLS is its P/B ratio of 2.66. 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, IR has a P/B of 2.81.
These metrics, and several others, help FLS earn a Value grade of B, while IR has been given a Value grade of D.
FLS sticks out from IR in both our Zacks Rank and Style Scores models, so value investors will likely feel that FLS is the better option right now.
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Flowserve Corporation (FLS) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
