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MARUY vs. HON: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Diversified Operations sector might want to consider either Marubeni Corp. (MARUY - Free Report) or 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while Honeywell International Inc. 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 MARUY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

MARUY currently has a forward P/E ratio of 4.10, while HON has a forward P/E of 22.25. We also note that MARUY has a PEG ratio of 0.55. 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 2.33.

Another notable valuation metric for MARUY is its P/B ratio of 0.87. 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 7.15.

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

MARUY stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MARUY is the superior value option right now.


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