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ST vs. WTS: Which Stock Is the Better Value Option?
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Investors with an interest in Instruments - Control stocks have likely encountered both Sensata (ST - Free Report) and Watts Water (WTS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Sensata is sporting a Zacks Rank of #2 (Buy), while Watts Water has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ST is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
ST currently has a forward P/E ratio of 24.99, while WTS has a forward P/E of 30.69. We also note that ST has a PEG ratio of 2.26. 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. WTS currently has a PEG ratio of 3.84.
Another notable valuation metric for ST is its P/B ratio of 2.92. 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, WTS has a P/B of 3.62.
Based on these metrics and many more, ST holds a Value grade of B, while WTS has a Value grade of C.
ST stands above WTS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ST is the superior value option right now.
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ST vs. WTS: Which Stock Is the Better Value Option?
Investors with an interest in Instruments - Control stocks have likely encountered both Sensata (ST - Free Report) and Watts Water (WTS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Sensata is sporting a Zacks Rank of #2 (Buy), while Watts Water has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ST is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
ST currently has a forward P/E ratio of 24.99, while WTS has a forward P/E of 30.69. We also note that ST has a PEG ratio of 2.26. 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. WTS currently has a PEG ratio of 3.84.
Another notable valuation metric for ST is its P/B ratio of 2.92. 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, WTS has a P/B of 3.62.
Based on these metrics and many more, ST holds a Value grade of B, while WTS has a Value grade of C.
ST stands above WTS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ST is the superior value option right now.