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Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both nVent Electric (NVT) and Littelfuse (LFUS). 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
nVent Electric and Littelfuse are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NVT likely has seen a stronger improvement to its earnings outlook than LFUS has recently. But this is only part of the picture 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.
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.
NVT currently has a forward P/E ratio of 14.16, while LFUS has a forward P/E of 42.70. We also note that NVT has a PEG ratio of 2.95. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LFUS currently has a PEG ratio of 3.56.
Another notable valuation metric for NVT is its P/B ratio of 1.25. 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, LFUS has a P/B of 3.
These metrics, and several others, help NVT earn a Value grade of B, while LFUS has been given a Value grade of C.
NVT has seen stronger estimate revision activity and sports more attractive valuation metrics than LFUS, so it seems like value investors will conclude that NVT is the superior option right now.
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nVent Electric PLC (NVT) : Free Stock Analysis Report
Littelfuse, Inc. (LFUS) : Free Stock Analysis Report
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