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ST vs. WWD: Which Stock Is the Better Value Option?

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Zacks Equity Research
·2 min read
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Investors interested in stocks from the Instruments - Control sector have probably already heard of Sensata (ST) and Woodward (WWD). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Sensata has a Zacks Rank of #2 (Buy), while Woodward has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ST likely has seen a stronger improvement to its earnings outlook than WWD 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.

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.

ST currently has a forward P/E ratio of 24.44, while WWD has a forward P/E of 32.59. We also note that ST has a PEG ratio of 2.21. 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. WWD currently has a PEG ratio of 2.38.

Another notable valuation metric for ST is its P/B ratio of 3.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WWD has a P/B of 3.56.

These metrics, and several others, help ST earn a Value grade of B, while WWD has been given a Value grade of C.

ST stands above WWD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ST is the superior value option right now.


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Sensata Technologies Holding N.V. (ST) : Free Stock Analysis Report
 
Woodward, Inc. (WWD) : Free Stock Analysis Report
 
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Zacks Investment Research