HAYW vs. GRMN: Which Stock Is the Better Value Option?

Investors with an interest in Electronics - Miscellaneous Products stocks have likely encountered both Hayward Holdings, Inc. (HAYW) and Garmin (GRMN). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Hayward Holdings, Inc. and Garmin are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

HAYW currently has a forward P/E ratio of 20.32, while GRMN has a forward P/E of 30.67. We also note that HAYW has a PEG ratio of 2.13. 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. GRMN currently has a PEG ratio of 2.75.

Another notable valuation metric for HAYW is its P/B ratio of 2.14. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GRMN has a P/B of 5.88.

These are just a few of the metrics contributing to HAYW's Value grade of B and GRMN's Value grade of D.

Both HAYW and GRMN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HAYW is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research