Investors interested in stocks from the Diversified Operations sector have probably already heard of Grupo Cibest (CIB) and Honeywell International Inc. (HON). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Grupo Cibest has a Zacks Rank of #1 (Strong Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CIB likely has seen a stronger improvement to its earnings outlook than HON has recently. 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.
CIB currently has a forward P/E ratio of 8.07, while HON has a forward P/E of 18.22. We also note that CIB has a PEG ratio of 0.90. 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. HON currently has a PEG ratio of 2.59.
Another notable valuation metric for CIB is its P/B ratio of 1.77. 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, HON has a P/B of 6.93.
These are just a few of the metrics contributing to CIB's Value grade of B and HON's Value grade of C.
CIB stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIB is the superior value option right now.
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Grupo Cibest S.A. - Sponsored ADR (CIB): 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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