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FERG or ITW: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Wolseley PLC (FERG - Free Report) and Illinois Tool Works (ITW - 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FERG is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
FERG currently has a forward P/E ratio of 18.78, while ITW has a forward P/E of 24.61. We also note that FERG has a PEG ratio of 2.01. 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. ITW currently has a PEG ratio of 2.09.
Another notable valuation metric for FERG is its P/B ratio of 7.06. 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, ITW has a P/B of 19.
These metrics, and several others, help FERG earn a Value grade of B, while ITW has been given a Value grade of C.
FERG sticks out from ITW in both our Zacks Rank and Style Scores models, so value investors will likely feel that FERG is the better option right now.
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FERG or ITW: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Wolseley PLC (FERG - Free Report) and Illinois Tool Works (ITW - 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FERG is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
FERG currently has a forward P/E ratio of 18.78, while ITW has a forward P/E of 24.61. We also note that FERG has a PEG ratio of 2.01. 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. ITW currently has a PEG ratio of 2.09.
Another notable valuation metric for FERG is its P/B ratio of 7.06. 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, ITW has a P/B of 19.
These metrics, and several others, help FERG earn a Value grade of B, while ITW has been given a Value grade of C.
FERG sticks out from ITW in both our Zacks Rank and Style Scores models, so value investors will likely feel that FERG is the better option right now.