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

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Investors interested in stocks from the Diversified Operations sector have probably already heard of Marubeni Corp. (MARUY - Free Report) and Honeywell International Inc. (HON - 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.

Currently, Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while Honeywell International Inc. has a Zacks Rank of #2 (Buy). 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. 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 4.39, while HON has a forward P/E of 26.98. We also note that MARUY has a PEG ratio of 0.27. 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 2.52.

Another notable valuation metric for MARUY is its P/B ratio of 0.82. 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 8.29.

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

MARUY has seen stronger estimate revision activity and sports more attractive valuation metrics than HON, so it seems like value investors will conclude that MARUY is the superior option right now.


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Marubeni Corp. (MARUY) - free report >>

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