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SKFRY or TKR: Which Is the Better Value Stock Right Now?

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·2 min read
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Investors looking for stocks in the Metal Products - Procurement and Fabrication sector might want to consider either AB SKF (SKFRY) or Timken (TKR). 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 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.

Right now, both AB SKF and Timken are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

SKFRY currently has a forward P/E ratio of 14.85, while TKR has a forward P/E of 16.41. We also note that SKFRY has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TKR currently has a PEG ratio of 2.20.

Another notable valuation metric for SKFRY is its P/B ratio of 2.41. 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, TKR has a P/B of 2.97.

Based on these metrics and many more, SKFRY holds a Value grade of B, while TKR has a Value grade of C.

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


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AB SKF (SKFRY) : Free Stock Analysis Report
 
Timken Company The (TKR) : Free Stock Analysis Report
 
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Zacks Investment Research