IR vs. IEX: Which Stock Is the Better Value Option?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Ingersoll-Rand (IR) or Idex (IEX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Ingersoll-Rand and Idex are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IR has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
IR currently has a forward P/E ratio of 16.79, while IEX has a forward P/E of 24.12. We also note that IR has a PEG ratio of 1.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IEX currently has a PEG ratio of 2.35.
Another notable valuation metric for IR is its P/B ratio of 3.13. 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, IEX has a P/B of 4.81.
Based on these metrics and many more, IR holds a Value grade of B, while IEX has a Value grade of D.
IR stands above IEX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IR is the superior value option right now.
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Ingersoll-Rand PLC (Ireland) (IR) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
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