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FERG or ITW: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Wolseley PLC (FERG - Free Report) or Illinois Tool Works (ITW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that FERG likely has seen a stronger improvement to its earnings outlook than ITW has recently. But this is only part of the picture for value investors.
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.
FERG currently has a forward P/E ratio of 11.16, while ITW has a forward P/E of 19.90. We also note that FERG has a PEG ratio of 0.83. 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. ITW currently has a PEG ratio of 1.99.
Another notable valuation metric for FERG is its P/B ratio of 5.47. 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, ITW has a P/B of 15.84.
Based on these metrics and many more, FERG holds a Value grade of B, while ITW has a Value grade of C.
FERG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FERG is likely the superior value option right now.
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FERG or ITW: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Wolseley PLC (FERG - Free Report) or Illinois Tool Works (ITW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Currently, Wolseley PLC has a Zacks Rank of #2 (Buy), while Illinois Tool Works has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that FERG likely has seen a stronger improvement to its earnings outlook than ITW has recently. But this is only part of the picture for value investors.
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.
FERG currently has a forward P/E ratio of 11.16, while ITW has a forward P/E of 19.90. We also note that FERG has a PEG ratio of 0.83. 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. ITW currently has a PEG ratio of 1.99.
Another notable valuation metric for FERG is its P/B ratio of 5.47. 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, ITW has a P/B of 15.84.
Based on these metrics and many more, FERG holds a Value grade of B, while ITW has a Value grade of C.
FERG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FERG is likely the superior value option right now.