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MARUY vs. HON: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Marubeni Corp. (MARUY - Free Report) and Honeywell International Inc. (HON - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that MARUY likely has seen a stronger improvement to its earnings outlook than HON has recently. But this is only part of the picture for value investors.

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.

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.

MARUY currently has a forward P/E ratio of 5.37, while HON has a forward P/E of 28.02. We also note that MARUY has a PEG ratio of 0.59. 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. HON currently has a PEG ratio of 2.65.

Another notable valuation metric for MARUY is its P/B ratio of 0.92. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HON has a P/B of 8.53.

Based on these metrics and many more, MARUY holds a Value grade of A, while HON has a Value grade of C.

MARUY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MARUY is likely the superior value option right now.


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