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SSUMY or GE: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Diversified Operations sector might want to consider either Sumitomo Corp. (SSUMY - Free Report) or General Electric (GE - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Sumitomo Corp. is sporting a Zacks Rank of #2 (Buy), while General Electric has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SSUMY has an improving earnings outlook. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SSUMY currently has a forward P/E ratio of 5.01, while GE has a forward P/E of 24.50. We also note that SSUMY has a PEG ratio of 1.97. 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. GE currently has a PEG ratio of 3.50.

Another notable valuation metric for SSUMY is its P/B ratio of 0.61. 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, GE has a P/B of 2.05.

These are just a few of the metrics contributing to SSUMY's Value grade of A and GE's Value grade of C.

SSUMY sticks out from GE in both our Zacks Rank and Style Scores models, so value investors will likely feel that SSUMY is the better option right now.


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