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SSUMY vs. HON: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Sumitomo Corp. (SSUMY - Free Report) and Honeywell International Inc. (HON - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Sumitomo Corp. is sporting a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold). This means that SSUMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 4.89, while HON has a forward P/E of 20.49. We also note that SSUMY has a PEG ratio of 1.93. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HON currently has a PEG ratio of 2.30.

Another notable valuation metric for SSUMY is its P/B ratio of 0.60. 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, HON has a P/B of 6.59.

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

SSUMY sticks out from HON 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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