POWL or KNYJY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of Powell Industries (POWL) and Kone Oyj Unsponsored ADR (KNYJY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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.
Powell Industries and Kone Oyj Unsponsored ADR are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that POWL has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
POWL currently has a forward P/E ratio of 15.34, while KNYJY has a forward P/E of 20.70. We also note that POWL has a PEG ratio of 1.10. 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. KNYJY currently has a PEG ratio of 2.02.
Another notable valuation metric for POWL is its P/B ratio of 2.76. 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, KNYJY has a P/B of 8.87.
These are just a few of the metrics contributing to POWL's Value grade of A and KNYJY's Value grade of C.
POWL has seen stronger estimate revision activity and sports more attractive valuation metrics than KNYJY, so it seems like value investors will conclude that POWL is the superior option right now.
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Powell Industries, Inc. (POWL) : Free Stock Analysis Report
Kone Oyj Unsponsored ADR (KNYJY) : Free Stock Analysis Report
