GRC vs. TRMB: Which Stock Is the Better Value Option?

Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Gorman-Rupp (GRC) and Trimble Navigation (TRMB). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Gorman-Rupp has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold) right now. This means that GRC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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 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.

GRC currently has a forward P/E ratio of 17.80, while TRMB has a forward P/E of 21.38. We also note that GRC has a PEG ratio of 1.37. 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. TRMB currently has a PEG ratio of 2.14.

Another notable valuation metric for GRC is its P/B ratio of 2.49. 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, TRMB has a P/B of 2.64.

Based on these metrics and many more, GRC holds a Value grade of B, while TRMB has a Value grade of D.

GRC sticks out from TRMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that GRC is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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