Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Oshkosh (OSK) or Wabco Holdings (WBC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Oshkosh has a Zacks Rank of #2 (Buy), while Wabco Holdings has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that OSK likely has seen a stronger improvement to its earnings outlook than WBC has recently. 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.
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.
OSK currently has a forward P/E ratio of 10.45, while WBC has a forward P/E of 17.41. We also note that OSK has a PEG ratio of 0.90. 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. WBC currently has a PEG ratio of 1.16.
Another notable valuation metric for OSK is its P/B ratio of 2.27. 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, WBC has a P/B of 5.07.
Based on these metrics and many more, OSK holds a Value grade of A, while WBC has a Value grade of C.
OSK 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 OSK is likely the superior value option right now.
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
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