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MMM or HON: Which Is the Better Value Stock Right Now?
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Investors with an interest in Diversified Operations stocks have likely encountered both 3M (MMM - Free Report) and Honeywell International Inc. (HON - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, 3M is sporting a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MMM likely has seen a stronger improvement to its earnings outlook than HON has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
MMM currently has a forward P/E ratio of 13.74, while HON has a forward P/E of 22.41. We also note that MMM has a PEG ratio of 1.45. 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 2.32.
Another notable valuation metric for MMM is its P/B ratio of 5.66. 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, HON has a P/B of 6.96.
These are just a few of the metrics contributing to MMM's Value grade of B and HON's Value grade of D.
MMM stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MMM is the superior value option right now.
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MMM or HON: Which Is the Better Value Stock Right Now?
Investors with an interest in Diversified Operations stocks have likely encountered both 3M (MMM - Free Report) and Honeywell International Inc. (HON - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, 3M is sporting a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MMM likely has seen a stronger improvement to its earnings outlook than HON has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
MMM currently has a forward P/E ratio of 13.74, while HON has a forward P/E of 22.41. We also note that MMM has a PEG ratio of 1.45. 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 2.32.
Another notable valuation metric for MMM is its P/B ratio of 5.66. 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, HON has a P/B of 6.96.
These are just a few of the metrics contributing to MMM's Value grade of B and HON's Value grade of D.
MMM stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MMM is the superior value option right now.