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CSL vs. RAVN: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Diversified Operations sector have probably already heard of Carlisle (CSL - Free Report) and Raven Industries . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Carlisle is sporting a Zacks Rank of #2 (Buy), while Raven Industries 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 CSL is likely seeing its earnings outlook improve to a greater extent. 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.

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.

CSL currently has a forward P/E ratio of 20.91, while RAVN has a forward P/E of 30.63. We also note that CSL has a PEG ratio of 1.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RAVN currently has a PEG ratio of 3.06.

Another notable valuation metric for CSL is its P/B ratio of 2.85. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RAVN has a P/B of 5.79.

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

CSL stands above RAVN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CSL is the superior value option right now.


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