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

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Investors with an interest in Instruments - Control stocks have likely encountered both Sensata (ST - Free Report) and Woodward (WWD - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Sensata has a Zacks Rank of #2 (Buy), while Woodward 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 ST has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 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.

ST currently has a forward P/E ratio of 24.23, while WWD has a forward P/E of 33.44. We also note that ST has a PEG ratio of 2.19. 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. WWD currently has a PEG ratio of 2.45.

Another notable valuation metric for ST is its P/B ratio of 3.05. 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, WWD has a P/B of 3.66.

These metrics, and several others, help ST earn a Value grade of B, while WWD has been given 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.


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

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

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