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MG vs. GRMN: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Mistras (MG) or Garmin (GRMN). 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 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, Mistras is sporting a Zacks Rank of #2 (Buy), while Garmin 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 MG 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

MG currently has a forward P/E ratio of 21.88, while GRMN has a forward P/E of 22.39. We also note that MG has a PEG ratio of 1.29. 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. GRMN currently has a PEG ratio of 3.05.

Another notable valuation metric for MG is its P/B ratio of 1.45. 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, GRMN has a P/B of 4.16.

These metrics, and several others, help MG earn a Value grade of A, while GRMN has been given a Value grade of D.

MG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MG is likely the superior value option right now.


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Mistras Group Inc (MG) : Free Stock Analysis Report
 
Garmin Ltd. (GRMN) : Free Stock Analysis Report
 
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