MOD vs. GNTX: Which Stock Is the Better Value Option?
Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Modine (MOD) or Gentex (GNTX). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Modine is sporting a Zacks Rank of #1 (Strong Buy), while Gentex has a Zacks Rank of #4 (Sell). This means that MOD'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 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 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.
MOD currently has a forward P/E ratio of 11.65, while GNTX has a forward P/E of 19. We also note that MOD has a PEG ratio of 0.47. 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. GNTX currently has a PEG ratio of 1.38.
Another notable valuation metric for MOD is its P/B ratio of 2.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GNTX has a P/B of 3.09.
Based on these metrics and many more, MOD holds a Value grade of A, while GNTX has a Value grade of C.
MOD 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 MOD is likely the superior value option right now.
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Modine Manufacturing Company (MOD) : Free Stock Analysis Report
Gentex Corporation (GNTX) : Free Stock Analysis Report
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