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ST vs. WTS: Which Stock Is the Better Value Option?
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Investors interested in Instruments - Control stocks are likely familiar with Sensata (ST - Free Report) and Watts Water (WTS - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, both Sensata and Watts Water are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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 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.
ST currently has a forward P/E ratio of 12.72, while WTS has a forward P/E of 23.31. We also note that ST has a PEG ratio of 1.15. 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. WTS currently has a PEG ratio of 2.91.
Another notable valuation metric for ST is its P/B ratio of 2.35. 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, WTS has a P/B of 4.13.
Based on these metrics and many more, ST holds a Value grade of B, while WTS has a Value grade of C.
Both ST and WTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ST is the superior value option right now.
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ST vs. WTS: Which Stock Is the Better Value Option?
Investors interested in Instruments - Control stocks are likely familiar with Sensata (ST - Free Report) and Watts Water (WTS - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, both Sensata and Watts Water are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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 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.
ST currently has a forward P/E ratio of 12.72, while WTS has a forward P/E of 23.31. We also note that ST has a PEG ratio of 1.15. 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. WTS currently has a PEG ratio of 2.91.
Another notable valuation metric for ST is its P/B ratio of 2.35. 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, WTS has a P/B of 4.13.
Based on these metrics and many more, ST holds a Value grade of B, while WTS has a Value grade of C.
Both ST and WTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ST is the superior value option right now.