Yahoo Finance 2 Top-Rated Stocks to Buy for Diversity and Value
Many of the Zacks Multi-Sector Conglomerates stocks offer solid diversification to investors’ portfolios. Their diverse operations are ideal for exposure to a variety of markets and at the moment two Multi-Sector Conglomerates are standing out with a Zacks Rank #1 (Strong Buy).
Let’s see why investors should consider buying these Multi-Sector Conglomerates right now.
Griffon (GFF)
Griffon Corporation looks intriguing at its current levels, operating in three segments: Home and Building Products, Telephonics, and Plastic Products.
Griffon oversees operations through its subsidiaries as a diversified management and holding company. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities along with guidance on divestitures.
Following a record year for EPS, Griffon’s earnings are forecasted to dip -3% in fiscal 2023 but rebound and rise 1% in FY24 at $4.02 per share. Notably, fiscal 2024 EPS projections would represent 148% growth over the last five years with 2020 earnings at $1.62 per share.
Plus, annual earnings estimates are nicely up over the last 60 days with Griffon’s price-to-earnings valuation standing out at the moment. Trading at $38 a share, Griffon stock trades at 9.4X forward earnings which is nicely beneath the Diversified Operations industry average of 15.4X and the S&P 500’s 20.5X.
Image Source: Zacks Investment Research
Sumitomo (SSUMY)
Another Multi-Sector Conglomerates stock that is worthy of investors’ consideration is Japan-based Sumitomo Corporation.
Sumitomo operates as a worldwide integrated trading company with its business operations including metal products, transportation and construction systems, infrastructure, media, mineral resources, electronics and general products, energy, and chemicals among others.
Trading around $21 a share, Sumitomo's P/E valutation is very attractive. Sumitomo stock currently trades at just 7.8X forward earnings despite EPS expected to drop -17% in its current fiscal 2024 at $2.79 per share.
With that being said, Sumitomo is following a very tough-to-compete-against year that saw EPS at $3.35 in the company’s FY23. Still, Sumitomo’s P/E valuation is well below the Diversified Operations industry average of 15.4X and the benchmark.
Furthermore, fiscal 2024 earnings estimates have started to trend higher again offering further support and Sumitomo’s price-to-sales ratio of 0.54X is also beneath the industry’s 1.01X and the S&P 500’s 3.71X.
Image Source: Zacks Investment Research
Bottom Line
With both Griffon and Sumitomo Corporation following exceptional years, rising earnings estimates in their current fiscal year is a great sign. Considering their vast reach and attractive valuations now appears to be a good time to buy these Multi-Sector Conglomerates.
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Sumitomo Corp. (SSUMY) : Free Stock Analysis Report
Griffon Corporation (GFF) : Free Stock Analysis Report
