Investors interested in stocks from the Metal Products - Procurement and Fabrication sector have probably already heard of Timken (TKR) and TriMas (TRS). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Timken and TriMas are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that TKR'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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
TKR currently has a forward P/E ratio of 9.11, while TRS has a forward P/E of 15.96. We also note that TKR has a PEG ratio of 0.97. 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. TRS currently has a PEG ratio of 3.19.
Another notable valuation metric for TKR is its P/B ratio of 2.15. 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, TRS has a P/B of 2.17.
These metrics, and several others, help TKR earn a Value grade of B, while TRS has been given a Value grade of C.
TKR stands above TRS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TKR is the superior value option right now.
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Timken Company (The) (TKR) : Free Stock Analysis Report
TriMas Corporation (TRS) : Free Stock Analysis Report
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