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PH or IEX: Which Is the Better Value Stock Right Now?

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Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Parker-Hannifin (PH - Free Report) and Idex (IEX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Parker-Hannifin is sporting a Zacks Rank of #2 (Buy), while Idex has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PH has an improving earnings outlook. 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.

PH currently has a forward P/E ratio of 18.45, while IEX has a forward P/E of 34.20. We also note that PH has a PEG ratio of 1.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IEX currently has a PEG ratio of 3.42.

Another notable valuation metric for PH is its P/B ratio of 3.58. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IEX has a P/B of 5.39.

These metrics, and several others, help PH earn a Value grade of A, while IEX has been given a Value grade of D.

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


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