Investors interested in Aerospace - Defense stocks are likely familiar with Wesco Aircraft Holdings (WAIR) and General Dynamics (GD). 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Wesco Aircraft Holdings has a Zacks Rank of #2 (Buy), while General Dynamics has a Zacks Rank of #3 (Hold). This means that WAIR'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 also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
WAIR currently has a forward P/E ratio of 12.62, while GD has a forward P/E of 14.80. We also note that WAIR has a PEG ratio of 1.05. 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. GD currently has a PEG ratio of 1.66.
Another notable valuation metric for WAIR is its P/B ratio of 1.49. 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, GD has a P/B of 4.11.
These metrics, and several others, help WAIR earn a Value grade of A, while GD has been given a Value grade of C.
WAIR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that WAIR is likely the superior value option right now.
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Wesco Aircraft Holdings, Inc. (WAIR) : Free Stock Analysis Report
General Dynamics Corporation (GD) : Free Stock Analysis Report
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