SSUMY vs. HON: Which Stock Is the Better Value Option?
Investors interested in Diversified Operations stocks are likely familiar with Sumitomo Corp. (SSUMY) and Honeywell International Inc. (HON). 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.
Sumitomo Corp. and Honeywell International Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 just one piece of the puzzle for value investors.
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.
SSUMY currently has a forward P/E ratio of 4.71, while HON has a forward P/E of 21.07. We also note that SSUMY has a PEG ratio of 1.63. 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. HON currently has a PEG ratio of 2.48.
Another notable valuation metric for SSUMY is its P/B ratio of 0.57. 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, HON has a P/B of 6.77.
Based on these metrics and many more, SSUMY holds a Value grade of A, while HON has a Value grade of D.
SSUMY has seen stronger estimate revision activity and sports more attractive valuation metrics than HON, 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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