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 stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Hayward Holdings, Inc. and Garmin are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HAYW is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
HAYW currently has a forward P/E ratio of 20.96, while GRMN has a forward P/E of 25.26. We also note that HAYW has a PEG ratio of 1.58. 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 2.34.
Another notable valuation metric for HAYW is its P/B ratio of 2.27. 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, GRMN has a P/B of 4.7.
Based on these metrics and many more, HAYW holds a Value grade of B, while GRMN has a Value grade of D.
HAYW 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 HAYW is likely the superior value 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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