HTHIY vs. DHR: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Diversified Operations sector have probably already heard of Hitachi Ltd. (HTHIY) and Danaher (DHR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Currently, Hitachi Ltd. has a Zacks Rank of #2 (Buy), while Danaher 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 HTHIY 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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
HTHIY currently has a forward P/E ratio of 8.52, while DHR has a forward P/E of 25.23. We also note that HTHIY has a PEG ratio of 1.59. 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. DHR currently has a PEG ratio of 2.89.
Another notable valuation metric for HTHIY is its P/B ratio of 1.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DHR has a P/B of 4.39.
Based on these metrics and many more, HTHIY holds a Value grade of B, while DHR has a Value grade of D.
HTHIY has seen stronger estimate revision activity and sports more attractive valuation metrics than DHR, so it seems like value investors will conclude that HTHIY is the superior option right now.
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Hitachi Ltd. (HTHIY) : Free Stock Analysis Report
Danaher Corporation (DHR) : Free Stock Analysis Report
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