Yahoo Finance BCKIY or HWM: Which Is the Better Value Stock Right Now?
Investors interested in Engineering - R and D Services stocks are likely familiar with Babcock International Group PLC (BCKIY) and Howmet (HWM). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Babcock International Group PLC and Howmet are both sporting 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 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BCKIY currently has a forward P/E ratio of 12.44, while HWM has a forward P/E of 33.12. We also note that BCKIY has a PEG ratio of 0.28. 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. HWM currently has a PEG ratio of 1.45.
Another notable valuation metric for BCKIY is its P/B ratio of 7.32. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HWM has a P/B of 8.
These metrics, and several others, help BCKIY earn a Value grade of B, while HWM has been given a Value grade of D.
Both BCKIY and HWM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCKIY is the superior value option right now.
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Babcock International Group PLC (BCKIY) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
