Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Oshkosh (OSK) and Wabco Holdings (WBC). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Oshkosh and Wabco Holdings are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that OSK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
OSK currently has a forward P/E ratio of 10.63, while WBC has a forward P/E of 17.30. We also note that OSK has a PEG ratio of 0.92. 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 1.15.
Another notable valuation metric for OSK is its P/B ratio of 2.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WBC has a P/B of 5.04.
These are just a few of the metrics contributing to OSK's Value grade of A and WBC's Value grade of C.
OSK stands above WBC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OSK is the superior value option right now.
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
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