Investors interested in Diversified Operations stocks are likely familiar with Marubeni Corp. (MARUY) and Honeywell International Inc. (HON). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Marubeni Corp. and Honeywell International Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that MARUY likely has seen a stronger improvement to its earnings outlook than HON has recently. 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.
MARUY currently has a forward P/E ratio of 10.91, while HON has a forward P/E of 20.55. We also note that MARUY has a PEG ratio of 1.75. 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. HON currently has a PEG ratio of 2.67.
Another notable valuation metric for MARUY is its P/B ratio of 1.6. 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, HON has a P/B of 7.73.
Based on these metrics and many more, MARUY holds a Value grade of A, while HON has a Value grade of D.
MARUY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MARUY is likely the superior value option right now.
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Marubeni Corp. (MARUY): Free Stock Analysis Report Honeywell International Inc. (HON): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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