Investors interested in Automotive - Original Equipment stocks are likely familiar with Phinia (PHIN) and Modine (MOD). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Phinia and Modine are sporting a Zacks Rank of #1 (Strong 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 factor that value investors are interested in.
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.
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.
PHIN currently has a forward P/E ratio of 11.26, while MOD has a forward P/E of 29.92. We also note that PHIN has a PEG ratio of 0.46. 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. MOD currently has a PEG ratio of 0.88.
Another notable valuation metric for PHIN is its P/B ratio of 1.18. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MOD has a P/B of 7.14.
Based on these metrics and many more, PHIN holds a Value grade of A, while MOD has a Value grade of C.
Both PHIN and MOD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PHIN is the superior value option right now.
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PHINIA Inc. (PHIN): Free Stock Analysis Report Modine Manufacturing Company (MOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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