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BRRAY vs. ITT: Which Stock Is the Better Value Option?

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Investors with an interest in Diversified Operations stocks have likely encountered both Barloworld Ltd. (BRRAY - Free Report) and ITT (ITT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Barloworld Ltd. has a Zacks Rank of #2 (Buy), while ITT has a Zacks Rank of #3 (Hold) right now. This means that BRRAY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

BRRAY currently has a forward P/E ratio of 9.97, while ITT has a forward P/E of 22.12. We also note that BRRAY has a PEG ratio of 0.34. 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. ITT currently has a PEG ratio of 1.46.

Another notable valuation metric for BRRAY is its P/B ratio of 1.16. 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, ITT has a P/B of 3.56.

Based on these metrics and many more, BRRAY holds a Value grade of B, while ITT has a Value grade of C.

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


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