Back to top

Image: Bigstock

MBUU vs. PII: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Leisure and Recreation Products sector have probably already heard of Malibu Boats (MBUU - Free Report) and Polaris Industries (PII - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Malibu Boats and Polaris Industries are sporting a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

MBUU currently has a forward P/E ratio of 18.38, while PII has a forward P/E of 19.30. We also note that MBUU has a PEG ratio of 1.23. 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. PII currently has a PEG ratio of 1.29.

Another notable valuation metric for MBUU is its P/B ratio of 7.24. 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, PII has a P/B of 8.08.

These are just a few of the metrics contributing to MBUU's Value grade of B and PII's Value grade of C.

Both MBUU and PII are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MBUU is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Polaris Inc. (PII) - free report >>

Malibu Boats, Inc. (MBUU) - free report >>