Yahoo Finance AZZ vs. ABBNY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either AZZ (AZZ) or ABB (ABBNY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Currently, AZZ has a Zacks Rank of #1 (Strong Buy), while ABB has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AZZ has an improving earnings outlook. But this is only part of the picture for value investors.
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.
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.
AZZ currently has a forward P/E ratio of 16.04, while ABBNY has a forward P/E of 23.71. We also note that AZZ has a PEG ratio of 1.15. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABBNY currently has a PEG ratio of 3.82.
Another notable valuation metric for AZZ is its P/B ratio of 2.06. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ABBNY has a P/B of 6.48.
These metrics, and several others, help AZZ earn a Value grade of B, while ABBNY has been given a Value grade of C.
AZZ stands above ABBNY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AZZ is the superior value option right now.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
ABB Ltd (ABBNY) : Free Stock Analysis Report
