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WAIR vs. LMT: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in Aerospace - Defense stocks are likely familiar with Wesco Aircraft Holdings (WAIR) and Lockheed Martin (LMT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Wesco Aircraft Holdings and Lockheed Martin are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

WAIR currently has a forward P/E ratio of 11.59, while LMT has a forward P/E of 17.43. We also note that WAIR has a PEG ratio of 0.97. 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. LMT currently has a PEG ratio of 2.45.

Another notable valuation metric for WAIR is its P/B ratio of 1.39. 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, LMT has a P/B of 35.77.

These metrics, and several others, help WAIR earn a Value grade of A, while LMT has been given a Value grade of C.

Both WAIR and LMT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WAIR is the superior value option right now.


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Wesco Aircraft Holdings, Inc. (WAIR) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
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