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EMR vs. ETN: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Emerson Electric (EMR - Free Report) or Eaton (ETN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Emerson Electric has a Zacks Rank of #2 (Buy), while Eaton has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EMR is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
EMR currently has a forward P/E ratio of 17.68, while ETN has a forward P/E of 22.17. We also note that EMR has a PEG ratio of 1.49. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ETN currently has a PEG ratio of 1.95.
Another notable valuation metric for EMR is its P/B ratio of 1.90. 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, ETN has a P/B of 4.33.
Based on these metrics and many more, EMR holds a Value grade of B, while ETN has a Value grade of C.
EMR stands above ETN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EMR is the superior value option right now.
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EMR vs. ETN: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Emerson Electric (EMR - Free Report) or Eaton (ETN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Emerson Electric has a Zacks Rank of #2 (Buy), while Eaton has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EMR is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
EMR currently has a forward P/E ratio of 17.68, while ETN has a forward P/E of 22.17. We also note that EMR has a PEG ratio of 1.49. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ETN currently has a PEG ratio of 1.95.
Another notable valuation metric for EMR is its P/B ratio of 1.90. 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, ETN has a P/B of 4.33.
Based on these metrics and many more, EMR holds a Value grade of B, while ETN has a Value grade of C.
EMR stands above ETN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EMR is the superior value option right now.