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HOG vs. TSLA: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Automotive - Domestic sector might want to consider either Harley-Davidson (HOG - Free Report) or Tesla (TSLA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Right now, both Harley-Davidson and Tesla are sporting a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

HOG currently has a forward P/E ratio of 11.26, while TSLA has a forward P/E of 182.21. We also note that HOG has a PEG ratio of 0.46. 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. TSLA currently has a PEG ratio of 4.86.

Another notable valuation metric for HOG is its P/B ratio of 2.44. 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, TSLA has a P/B of 38.78.

These metrics, and several others, help HOG earn a Value grade of A, while TSLA has been given a Value grade of F.

Both HOG and TSLA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HOG is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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HarleyDavidson, Inc. (HOG) - free report >>

Tesla, Inc. (TSLA) - free report >>

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