MGA or GNTX: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Magna (MGA) or Gentex (GNTX). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Magna has a Zacks Rank of #1 (Strong Buy), while Gentex has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that MGA likely has seen a stronger improvement to its earnings outlook than GNTX has recently. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MGA currently has a forward P/E ratio of 21.02, while GNTX has a forward P/E of 24.16. We also note that MGA has a PEG ratio of 4.20. 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. GNTX currently has a PEG ratio of 11.67.
Another notable valuation metric for MGA is its P/B ratio of 1.76. 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, GNTX has a P/B of 4.21.
These are just a few of the metrics contributing to MGA's Value grade of A and GNTX's Value grade of D.
MGA sticks out from GNTX in both our Zacks Rank and Style Scores models, so value investors will likely feel that MGA is the better option right now.
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Magna International Inc. (MGA) : Free Stock Analysis Report
Gentex Corporation (GNTX) : Free Stock Analysis Report
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