Yahoo Finance DAN vs. RACE: Which Stock Should Value Investors Buy Now?
Investors interested in Automotive - Original Equipment stocks are likely familiar with Dana (DAN) and Ferrari (RACE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Dana has a Zacks Rank of #1 (Strong Buy), while Ferrari has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DAN is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
DAN currently has a forward P/E ratio of 10.50, while RACE has a forward P/E of 48.17. We also note that DAN has a PEG ratio of 1.35. 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. RACE currently has a PEG ratio of 4.42.
Another notable valuation metric for DAN is its P/B ratio of 1.73. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RACE has a P/B of 22.26.
These are just a few of the metrics contributing to DAN's Value grade of A and RACE's Value grade of F.
DAN sticks out from RACE in both our Zacks Rank and Style Scores models, so value investors will likely feel that DAN is the better option right now.
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Dana Incorporated (DAN) : Free Stock Analysis Report
Ferrari N.V. (RACE) : Free Stock Analysis Report
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