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DAN or RACE: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Dana (DAN - Free Report) and Ferrari (RACE - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Dana has a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This means that DAN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

DAN currently has a forward P/E ratio of 5.55, while RACE has a forward P/E of 30.35. We also note that DAN has a PEG ratio of 1.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RACE currently has a PEG ratio of 2.

Another notable valuation metric for DAN is its P/B ratio of 1.89. 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, RACE has a P/B of 14.69.

These are just a few of the metrics contributing to DAN's Value grade of A and RACE's Value grade of F.

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


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Dana Incorporated (DAN) - free report >>

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