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

Zacks Equity Research
·2-min read

Investors interested in stocks from the Diversified Operations sector have probably already heard of Marubeni Corp. (MARUY) and ITT (ITT). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #3 (Hold) right now. This means that MARUY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

MARUY currently has a forward P/E ratio of 3.66, while ITT has a forward P/E of 14.73. We also note that MARUY has a PEG ratio of 0.49. 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. ITT currently has a PEG ratio of 1.21.

Another notable valuation metric for MARUY is its P/B ratio of 0.73. 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, ITT has a P/B of 2.71.

Based on these metrics and many more, MARUY holds a Value grade of A, while ITT has a Value grade of C.

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


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Marubeni Corp. (MARUY) : Free Stock Analysis Report
 
ITT Inc. (ITT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research