Yahoo Finance SKFRY or ESAB: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Metal Products - Procurement and Fabrication sector have probably already heard of AB SKF (SKFRY) and Esab (ESAB). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both AB SKF and Esab are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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 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.
SKFRY currently has a forward P/E ratio of 15.07, while ESAB has a forward P/E of 20.03. We also note that SKFRY has a PEG ratio of 0.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ESAB currently has a PEG ratio of 1.70.
Another notable valuation metric for SKFRY is its P/B ratio of 1.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ESAB has a P/B of 3.77.
These are just a few of the metrics contributing to SKFRY's Value grade of A and ESAB's Value grade of C.
Both SKFRY and ESAB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SKFRY is the superior value option right now.
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AB SKF (SKFRY) : Free Stock Analysis Report
ESAB Corporation (ESAB) : Free Stock Analysis Report
