U.S. Markets open in 8 hrs 54 mins
  • Crude Oil

    70.51
    -0.05 (-0.07%)
     
  • Gold

    1,768.40
    -9.80 (-0.55%)
     
  • Silver

    23.03
    +0.46 (+2.05%)
     
  • EUR/USD

    1.1696
    -0.0034 (-0.2924%)
     
  • 10-Yr Bond

    1.3360
    +0.0120 (+0.91%)
     
  • Vix

    20.87
    -3.49 (-14.33%)
     
  • GBP/USD

    1.3619
    -0.0045 (-0.3282%)
     
  • USD/JPY

    109.7800
    +0.5600 (+0.5127%)
     
  • BTC-USD

    44,276.77
    +121.16 (+0.27%)
     
  • CMC Crypto 200

    1,089.55
    +49.07 (+4.72%)
     
  • FTSE 100

    7,083.37
    +102.39 (+1.47%)
     
  • Nikkei 225

    29,639.40
    -200.31 (-0.67%)
     

RBC vs. ETN: Which Stock Is the Better Value Option?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of Regal Beloit (RBC) and Eaton (ETN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Right now, both Regal Beloit and Eaton are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 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.

RBC currently has a forward P/E ratio of 17.05, while ETN has a forward P/E of 24.50. We also note that RBC has a PEG ratio of 1.70. 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. ETN currently has a PEG ratio of 2.23.

Another notable valuation metric for RBC is its P/B ratio of 2.07. 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, ETN has a P/B of 4.07.

These metrics, and several others, help RBC earn a Value grade of B, while ETN has been given a Value grade of C.

Both RBC and ETN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RBC is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Regal Beloit Corporation (RBC) : Free Stock Analysis Report
 
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research