SRI vs. LFUS: Which Stock Should Value Investors Buy Now?
Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with Stoneridge (SRI) and Littelfuse (LFUS). But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Stoneridge has a Zacks Rank of #2 (Buy), while Littelfuse has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SRI likely has seen a stronger improvement to its earnings outlook than LFUS has recently. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SRI currently has a forward P/E ratio of 15.88, while LFUS has a forward P/E of 23.41. We also note that SRI has a PEG ratio of 1.87. 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. LFUS currently has a PEG ratio of 1.95.
Another notable valuation metric for SRI is its P/B ratio of 3.67. 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, LFUS has a P/B of 3.87.
Based on these metrics and many more, SRI holds a Value grade of B, while LFUS has a Value grade of D.
SRI sticks out from LFUS in both our Zacks Rank and Style Scores models, so value investors will likely feel that SRI is the better option right now.
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Stoneridge, Inc. (SRI) : Free Stock Analysis Report
Littelfuse, Inc. (LFUS) : Free Stock Analysis Report
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