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RBC or IIVI: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Updated
Vanda (VNDA) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Regal Beloit (RBC) or II-VI (IIVI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Currently, Regal Beloit has a Zacks Rank of #2 (Buy), while II-VI has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that RBC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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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.

RBC currently has a forward P/E ratio of 13.69, while IIVI has a forward P/E of 29.93. We also note that RBC has a PEG ratio of 1.37. 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. IIVI currently has a PEG ratio of 1.87.

Another notable valuation metric for RBC is its P/B ratio of 1.48. 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, IIVI has a P/B of 2.73.

These are just a few of the metrics contributing to RBC's Value grade of A and IIVI's Value grade of C.

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


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Regal Beloit Corporation (RBC) : Free Stock Analysis Report
 
II-VI Incorporated (IIVI) : Free Stock Analysis Report
 
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