Advertisement
UK markets closed

  • NIKKEI 225

    37,552.16
    +113.55 (+0.30%)
     

  • HANG SENG

    16,828.93
    +317.24 (+1.92%)
     

  • CRUDE OIL

    83.36
    +1.46 (+1.78%)
     

  • GOLD FUTURES

    2,336.60
    -9.80 (-0.42%)
     

  • DOW

    38,493.97
    +253.99 (+0.66%)
     

  • Bitcoin GBP

    53,423.82
    +93.94 (+0.18%)
     

  • CMC Crypto 200

    1,432.50
    +17.74 (+1.25%)
     

  • NASDAQ Composite

    15,701.72
    +250.42 (+1.62%)
     

  • UK FTSE All Share

    4,378.75
    +16.15 (+0.37%)
     
Money:

What is the true cost of the UK state pension?

To get a sense of the true value of the state pension, you can look at how much you would need to save to match it yourself

ITT or DHR: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Diversified Operations sector might want to consider either ITT (ITT) or Danaher (DHR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

ITT has a Zacks Rank of #2 (Buy), while Danaher has a Zacks Rank of #3 (Hold) right now. This means that ITT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

ADVERTISEMENT

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.

ITT currently has a forward P/E ratio of 18.75, while DHR has a forward P/E of 30.63. We also note that ITT has a PEG ratio of 1.88. 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. DHR currently has a PEG ratio of 2.45.

Another notable valuation metric for ITT is its P/B ratio of 3.06. 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, DHR has a P/B of 3.31.

These are just a few of the metrics contributing to ITT's Value grade of B and DHR's Value grade of F.

ITT stands above DHR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ITT is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ITT Inc. (ITT) : Free Stock Analysis Report
 
Danaher Corporation (DHR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.