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IR vs. NDSN: Which Stock Is the Better Value Option?

Zacks Equity Research
SNE vs. DLB: 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 Nordson (NDSN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Ingersoll-Rand has a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #4 (Sell). This means that IR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

IR currently has a forward P/E ratio of 18.01, while NDSN has a forward P/E of 22.51. We also note that IR has a PEG ratio of 1.56. 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. NDSN currently has a PEG ratio of 1.72.

Another notable valuation metric for IR is its P/B ratio of 3.59. 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, NDSN has a P/B of 5.75.

Based on these metrics and many more, IR holds a Value grade of B, while NDSN has a Value grade of D.

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


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Ingersoll-Rand PLC (Ireland) (IR) : Free Stock Analysis Report
 
Nordson Corporation (NDSN) : Free Stock Analysis Report
 
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