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B or NDSN: Which Is the Better Value Stock Right Now?

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Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Barnes Group (B - Free Report) and Nordson (NDSN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Barnes Group has a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #3 (Hold) right now. This means that B'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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

B currently has a forward P/E ratio of 14.99, while NDSN has a forward P/E of 24.60. We also note that B has a PEG ratio of 1.50. 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. NDSN currently has a PEG ratio of 1.89.

Another notable valuation metric for B is its P/B ratio of 1.21. 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, NDSN has a P/B of 4.87.

These metrics, and several others, help B earn a Value grade of B, while NDSN has been given a Value grade of D.

B stands above NDSN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that B is the superior value option right now.


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