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ENS vs. EMR: Which Stock Should Value Investors Buy Now?

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Investors interested in Manufacturing - Electronics stocks are likely familiar with EnerSys (ENS - Free Report) and Emerson Electric (EMR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, EnerSys has a Zacks Rank of #2 (Buy), while Emerson Electric has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ENS likely has seen a stronger improvement to its earnings outlook than EMR has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

ENS currently has a forward P/E ratio of 16.66, while EMR has a forward P/E of 17.45. We also note that ENS has a PEG ratio of 1.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EMR currently has a PEG ratio of 2.03.

Another notable valuation metric for ENS is its P/B ratio of 2.97. 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 4.45.

These are just a few of the metrics contributing to ENS's Value grade of A and EMR's Value grade of C.

ENS sticks out from EMR in both our Zacks Rank and Style Scores models, so value investors will likely feel that ENS is the better option right now.


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