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FLS or NDSN: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Flowserve (FLS - Free Report) or Nordson (NDSN - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Flowserve has a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FLS is likely seeing its earnings outlook improve to a greater extent. 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 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.

FLS currently has a forward P/E ratio of 18.54, while NDSN has a forward P/E of 24.21. We also note that FLS has a PEG ratio of 0.78. 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. NDSN currently has a PEG ratio of 1.86.

Another notable valuation metric for FLS is its P/B ratio of 2.57. 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, NDSN has a P/B of 5.12.

These metrics, and several others, help FLS earn a Value grade of B, while NDSN has been given a Value grade of D.

FLS has seen stronger estimate revision activity and sports more attractive valuation metrics than NDSN, so it seems like value investors will conclude that FLS is the superior option right now.


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