Back to top

Image: Bigstock

MARUY or HON: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Diversified Operations stocks are likely familiar with 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while Honeywell International Inc. 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 MARUY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

MARUY currently has a forward P/E ratio of 4.12, while HON has a forward P/E of 28.52. We also note that MARUY has a PEG ratio of 0.26. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HON currently has a PEG ratio of 2.67.

Another notable valuation metric for MARUY is its P/B ratio of 0.77. 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, HON has a P/B of 8.76.

These metrics, and several others, help MARUY earn a Value grade of A, while HON has been given a Value grade of C.

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


See More Zacks Research for These Tickers


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


Honeywell International Inc. (HON) - free report >>

Marubeni Corp. (MARUY) - free report >>

Published in