Investors looking for stocks in the Industrial Services sector might want to consider either Siemens AG (SIEGY) or DMC Global (BOOM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Siemens AG and DMC Global are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SIEGY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
SIEGY currently has a forward P/E ratio of 19.77, while BOOM has a forward P/E of 81.04. We also note that SIEGY has a PEG ratio of 1.21. 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. BOOM currently has a PEG ratio of 4.05.
Another notable valuation metric for SIEGY is its P/B ratio of 2.61. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BOOM has a P/B of 4.46.
Based on these metrics and many more, SIEGY holds a Value grade of B, while BOOM has a Value grade of D.
SIEGY has seen stronger estimate revision activity and sports more attractive valuation metrics than BOOM, so it seems like value investors will conclude that SIEGY is the superior 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
Siemens AG (SIEGY) : Free Stock Analysis Report
DMC Global Inc. (BOOM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research