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DXPE vs. FLS: Which Stock Is the Better Value Option?

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Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both DXP Enterprises (DXPE - Free Report) and Flowserve (FLS - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, DXP Enterprises has a Zacks Rank of #2 (Buy), while Flowserve has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that DXPE likely has seen a stronger improvement to its earnings outlook than FLS has recently. But this is just one piece of the puzzle for value investors.

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 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.

DXPE currently has a forward P/E ratio of 13.60, while FLS has a forward P/E of 19.42. We also note that DXPE has a PEG ratio of 0.78. 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. FLS currently has a PEG ratio of 1.28.

Another notable valuation metric for DXPE is its P/B ratio of 1.73. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FLS has a P/B of 3.20.

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

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


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