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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 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 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 #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ENS 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.

ENS currently has a forward P/E ratio of 15.58, while EMR has a forward P/E of 20.58. We also note that ENS has a PEG ratio of 1.56. 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 2.68.

Another notable valuation metric for ENS is its P/B ratio of 2.15. 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 5.15.

These metrics, and several others, help ENS earn a Value grade of B, while EMR has been given a Value grade of C.

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


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