Yahoo Finance FLS vs. IR: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Flowserve (FLS) and Ingersoll Rand (IR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 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.
Flowserve and Ingersoll Rand are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that FLS likely has seen a stronger improvement to its earnings outlook than IR has recently. But this is only part of the picture for value investors.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FLS currently has a forward P/E ratio of 18.78, while IR has a forward P/E of 28.64. We also note that FLS has a PEG ratio of 1.29. 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. IR currently has a PEG ratio of 2.94.
Another notable valuation metric for FLS is its P/B ratio of 3.27. 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, IR has a P/B of 3.77.
These metrics, and several others, help FLS earn a Value grade of B, while IR has been given a Value grade of D.
FLS stands above IR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FLS is the superior value option right now.
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Flowserve Corporation (FLS) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
