Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Hayward Holdings, Inc. (HAYW) or Teradyne (TER). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Hayward Holdings, Inc. has a Zacks Rank of #2 (Buy), while Teradyne has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HAYW has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
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.
HAYW currently has a forward P/E ratio of 18.73, while TER has a forward P/E of 24.46. We also note that HAYW has a PEG ratio of 2.19. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TER currently has a PEG ratio of 3.66.
Another notable valuation metric for HAYW is its P/B ratio of 2.07. 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, TER has a P/B of 4.77.
These metrics, and several others, help HAYW earn a Value grade of B, while TER has been given a Value grade of F.
HAYW has seen stronger estimate revision activity and sports more attractive valuation metrics than TER, so it seems like value investors will conclude that HAYW is the superior option right now.
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Hayward Holdings, Inc. (HAYW): Free Stock Analysis Report Teradyne, Inc. (TER): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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