Investors with an interest in Automotive - Original Equipment stocks have likely encountered both Aptiv PLC (APTV) and Modine (MOD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Aptiv PLC has a Zacks Rank of #2 (Buy), while Modine has a Zacks Rank of #3 (Hold) right now. This means that APTV's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.
APTV currently has a forward P/E ratio of 11.33, while MOD has a forward P/E of 33.83. We also note that APTV has a PEG ratio of 0.93. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MOD currently has a PEG ratio of 1.00.
Another notable valuation metric for APTV is its P/B ratio of 1.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MOD has a P/B of 8.07.
These metrics, and several others, help APTV earn a Value grade of A, while MOD has been given a Value grade of C.
APTV has seen stronger estimate revision activity and sports more attractive valuation metrics than MOD, so it seems like value investors will conclude that APTV is the superior option right now.
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Aptiv PLC (APTV): 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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