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FLEX or GRMN: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Flex (FLEX - Free Report) or Garmin (GRMN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Right now, Flex is sporting a Zacks Rank of #2 (Buy), while Garmin has a Zacks Rank of #4 (Sell). This means that FLEX'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 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 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.

FLEX currently has a forward P/E ratio of 11.69, while GRMN has a forward P/E of 26.80. We also note that FLEX has a PEG ratio of 0.88. 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. GRMN currently has a PEG ratio of 3.94.

Another notable valuation metric for FLEX is its P/B ratio of 2.67. 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, GRMN has a P/B of 4.82.

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

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


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