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

Zacks Equity Research
Energous (WATT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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 presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Timken has a Zacks Rank of #1 (Strong Buy), while TriMas has a Zacks Rank of #4 (Sell) 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 just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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 10.93, while TRS has a forward P/E of 17.59. We also note that TKR has a PEG ratio of 1.23. 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 3.52.

Another notable valuation metric for TKR is its P/B ratio of 2.18. 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 2.43.

Based on these metrics and many more, TKR holds a Value grade of B, while TRS has a Value grade of C.

TKR has seen stronger estimate revision activity and sports more attractive valuation metrics than TRS, so it seems like value investors will conclude that TKR is the superior option right now.


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