LDOS vs. LMT: Which Stock Is the Better Value Option?
Investors interested in stocks from the Aerospace - Defense sector have probably already heard of Leidos (LDOS) and Lockheed Martin (LMT). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Leidos is sporting a Zacks Rank of #2 (Buy), while Lockheed Martin has a Zacks Rank of #4 (Sell). This means that LDOS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
LDOS currently has a forward P/E ratio of 16.54, while LMT has a forward P/E of 17.08. We also note that LDOS has a PEG ratio of 2.04. 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. LMT currently has a PEG ratio of 4.08.
Another notable valuation metric for LDOS is its P/B ratio of 4.14. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LMT has a P/B of 15.78.
These are just a few of the metrics contributing to LDOS's Value grade of B and LMT's Value grade of C.
LDOS stands above LMT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LDOS is the superior value option right now.
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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
