WWD vs. BMI: Which Stock Is the Better Value Option?
Investors looking for stocks in the Instruments - Control sector might want to consider either Woodward (WWD) or Badger Meter (BMI). But which of these two companies is the best option for those looking for undervalued stocks? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Woodward and Badger Meter have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
WWD currently has a forward P/E ratio of 27.36, while BMI has a forward P/E of 49.64. We also note that WWD has a PEG ratio of 1.78. 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. BMI currently has a PEG ratio of 2.43.
Another notable valuation metric for WWD is its P/B ratio of 3.92. 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, BMI has a P/B of 9.07.
These are just a few of the metrics contributing to WWD's Value grade of B and BMI's Value grade of D.
Both WWD and BMI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WWD is the superior value option right now.
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Woodward, Inc. (WWD) : Free Stock Analysis Report
Badger Meter, Inc. (BMI) : Free Stock Analysis Report
