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TKR vs. TRS: Which Stock Is the Better Value Option?

Zacks Equity Research
Best Buy (BBY) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Investors interested in Metal Products - Procurement and Fabrication stocks are likely familiar with Timken (TKR) and TriMas (TRS). But which of these two stocks presents investors with the better value opportunity right now? 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 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.

Currently, Timken has a Zacks Rank of #2 (Buy), while TriMas has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TKR has an improving earnings outlook. But this is just one piece of the puzzle 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

TKR currently has a forward P/E ratio of 11.08, while TRS has a forward P/E of 17.26. We also note that TKR has a PEG ratio of 0.78. 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 3.45.

Another notable valuation metric for TKR is its P/B ratio of 2.21. 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, TRS has a P/B of 2.38.

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

TKR sticks out from TRS in both our Zacks Rank and Style Scores models, so value investors will likely feel that TKR is the better 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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