HTHIY or DHR: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Diversified Operations sector might want to consider either Hitachi Ltd. (HTHIY) or Danaher (DHR). But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Right now, Hitachi Ltd. is sporting a Zacks Rank of #1 (Strong Buy), while Danaher has a Zacks Rank of #3 (Hold). This means that HTHIY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
HTHIY currently has a forward P/E ratio of 11.42, while DHR has a forward P/E of 26.23. We also note that HTHIY has a PEG ratio of 1.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DHR currently has a PEG ratio of 2.19.
Another notable valuation metric for HTHIY is its P/B ratio of 1.36. 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, DHR has a P/B of 4.
These metrics, and several others, help HTHIY earn a Value grade of B, while DHR has been given a Value grade of D.
HTHIY stands above DHR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HTHIY is the superior value option right now.
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Hitachi Ltd. (HTHIY) : Free Stock Analysis Report
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