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ETN or EMR: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of Eaton (ETN - Free Report) and Emerson Electric (EMR - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Eaton and Emerson Electric are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ETN has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ETN currently has a forward P/E ratio of 14.88, while EMR has a forward P/E of 19.61. We also note that ETN has a PEG ratio of 1.45. 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. EMR currently has a PEG ratio of 1.93.
Another notable valuation metric for ETN is its P/B ratio of 2.07. 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, EMR has a P/B of 5.51.
These metrics, and several others, help ETN earn a Value grade of A, while EMR has been given a Value grade of C.
ETN has seen stronger estimate revision activity and sports more attractive valuation metrics than EMR, so it seems like value investors will conclude that ETN is the superior option right now.
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ETN or EMR: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of Eaton (ETN - Free Report) and Emerson Electric (EMR - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Eaton and Emerson Electric are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ETN has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ETN currently has a forward P/E ratio of 14.88, while EMR has a forward P/E of 19.61. We also note that ETN has a PEG ratio of 1.45. 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. EMR currently has a PEG ratio of 1.93.
Another notable valuation metric for ETN is its P/B ratio of 2.07. 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, EMR has a P/B of 5.51.
These metrics, and several others, help ETN earn a Value grade of A, while EMR has been given a Value grade of C.
ETN has seen stronger estimate revision activity and sports more attractive valuation metrics than EMR, so it seems like value investors will conclude that ETN is the superior option right now.