SSUMY or ITT: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Diversified Operations sector have probably already heard of Sumitomo Corp. (SSUMY) and ITT (ITT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Right now, Sumitomo Corp. is sporting a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #3 (Hold). This means that SSUMY'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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SSUMY currently has a forward P/E ratio of 5.13, while ITT has a forward P/E of 18.70. We also note that SSUMY has a PEG ratio of 1.13. 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. ITT currently has a PEG ratio of 1.52.
Another notable valuation metric for SSUMY is its P/B ratio of 0.81. 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, ITT has a P/B of 3.65.
These are just a few of the metrics contributing to SSUMY's Value grade of A and ITT's Value grade of C.
SSUMY has seen stronger estimate revision activity and sports more attractive valuation metrics than ITT, so it seems like value investors will conclude that SSUMY is the superior option right now.
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Sumitomo Corp. (SSUMY) : Free Stock Analysis Report
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