Back to top

Image: Bigstock

ST vs. WWD: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Instruments - Control stocks are likely familiar with Sensata (ST - Free Report) and Woodward (WWD - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 Woodward has a Zacks Rank of #5 (Strong Sell). This means that ST's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

ST currently has a forward P/E ratio of 22.81, while WWD has a forward P/E of 29.58. We also note that ST has a PEG ratio of 2.07. 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. WWD currently has a PEG ratio of 2.16.

Another notable valuation metric for ST is its P/B ratio of 2.87. 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, WWD has a P/B of 3.23.

Based on these metrics and many more, ST holds a Value grade of B, while WWD has a Value grade of C.

ST sticks out from WWD in both our Zacks Rank and Style Scores models, so value investors will likely feel that ST is the better option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Sensata Technologies Holding N.V. (ST) - free report >>

Woodward, Inc. (WWD) - free report >>

Published in