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SXI vs. IR: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Standex International (SXI - Free Report) and Ingersoll Rand (IR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Standex International has a Zacks Rank of #2 (Buy), while Ingersoll Rand has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SXI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SXI currently has a forward P/E ratio of 16.09, while IR has a forward P/E of 28.53. We also note that SXI has a PEG ratio of 1.15. 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. IR currently has a PEG ratio of 3.60.

Another notable valuation metric for SXI is its P/B ratio of 1.59. 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, IR has a P/B of 1.72.

Based on these metrics and many more, SXI holds a Value grade of B, while IR has a Value grade of F.

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


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