Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Daktronics (DAKT) or Rockwell Automation (ROK). 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.
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.
Currently, Daktronics has a Zacks Rank of #1 (Strong Buy), while Rockwell Automation has a Zacks Rank of #3 (Hold). This means that DAKT'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 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
DAKT currently has a forward P/E ratio of 20.38, while ROK has a forward P/E of 35.39. We also note that DAKT has a PEG ratio of 0.68. 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. ROK currently has a PEG ratio of 3.69.
Another notable valuation metric for DAKT is its P/B ratio of 3.9. 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, ROK has a P/B of 10.86.
Based on these metrics and many more, DAKT holds a Value grade of B, while ROK has a Value grade of D.
DAKT sticks out from ROK in both our Zacks Rank and Style Scores models, so value investors will likely feel that DAKT is the better option right now.
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Daktronics, Inc. (DAKT): Free Stock Analysis Report Rockwell Automation, Inc. (ROK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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