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SXI or IR: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Standex International (SXI - Free Report) or Ingersoll Rand (IR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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 #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SXI has an improving earnings outlook. However, value investors will care about much more than just this.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SXI currently has a forward P/E ratio of 17.04, while IR has a forward P/E of 28.68. We also note that SXI has a PEG ratio of 1.22. 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. IR currently has a PEG ratio of 3.62.

Another notable valuation metric for SXI is its P/B ratio of 1.69. 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, IR has a P/B of 1.76.

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

SXI has seen stronger estimate revision activity and sports more attractive valuation metrics than IR, so it seems like value investors will conclude that SXI is the superior option right now.


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