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STRL or ALFVY: Which Is the Better Value Stock Right Now?

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Investors interested in Engineering - R and D Services stocks are likely familiar with Sterling Infrastructure (STRL - Free Report) and Alfa Laval AB Unsponsored ADR (ALFVY - 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 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, Sterling Infrastructure is sporting a Zacks Rank of #2 (Buy), while Alfa Laval AB Unsponsored ADR 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 STRL 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.

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.

STRL currently has a forward P/E ratio of 8, while ALFVY has a forward P/E of 20.57. We also note that STRL has a PEG ratio of 0.44. 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. ALFVY currently has a PEG ratio of 2.24.

Another notable valuation metric for STRL is its P/B ratio of 1.81. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ALFVY has a P/B of 3.17.

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

STRL has seen stronger estimate revision activity and sports more attractive valuation metrics than ALFVY, so it seems like value investors will conclude that STRL is the superior option right now.


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Sterling Infrastructure, Inc. (STRL) - free report >>

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