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ENS or EMR: Which Is the Better Value Stock Right Now?

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Investors with an interest in Manufacturing - Electronics stocks have likely encountered both EnerSys (ENS - 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 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, EnerSys is sporting a Zacks Rank of #2 (Buy), while Emerson Electric has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ENS 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.

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.

ENS currently has a forward P/E ratio of 15.18, while EMR has a forward P/E of 16.34. We also note that ENS has a PEG ratio of 1.52. 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 1.90.

Another notable valuation metric for ENS is its P/B ratio of 2.72. 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, EMR has a P/B of 4.18.

Based on these metrics and many more, ENS holds a Value grade of A, while EMR has a Value grade of C.

ENS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ENS is likely the superior value option right now.


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