Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Hayward Holdings, Inc. (HAYW) or Garmin (GRMN). 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Hayward Holdings, Inc. and Garmin are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that HAYW'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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
HAYW currently has a forward P/E ratio of 20.76, while GRMN has a forward P/E of 23.80. We also note that HAYW has a PEG ratio of 1.57. 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. GRMN currently has a PEG ratio of 2.21.
Another notable valuation metric for HAYW is its P/B ratio of 2.25. 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 4.43.
These metrics, and several others, help HAYW earn a Value grade of B, while GRMN has been given a Value grade of D.
HAYW sticks out from GRMN in both our Zacks Rank and Style Scores models, so value investors will likely feel that HAYW is the better option right now.
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Hayward Holdings, Inc. (HAYW): Free Stock Analysis Report Garmin Ltd. (GRMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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