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AGCO or LNN: Which Is the Better Value Stock Right Now?

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Investors with an interest in Manufacturing - Farm Equipment stocks have likely encountered both Agco (AGCO - Free Report) and Lindsay (LNN - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Agco has a Zacks Rank of #2 (Buy), while Lindsay has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AGCO likely has seen a stronger improvement to its earnings outlook than LNN has recently. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

AGCO currently has a forward P/E ratio of 8.56, while LNN has a forward P/E of 17.41. We also note that AGCO has a PEG ratio of 0.81. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LNN currently has a PEG ratio of 0.92.

Another notable valuation metric for AGCO is its P/B ratio of 2.21. 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, LNN has a P/B of 3.11.

Based on these metrics and many more, AGCO holds a Value grade of A, while LNN has a Value grade of C.

AGCO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AGCO is likely the superior value option right now.


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