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DRS or HEI: Which Is the Better Value Stock Right Now?
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Investors with an interest in Aerospace - Defense Equipment stocks have likely encountered both Leonardo DRS, Inc. (DRS - Free Report) and Heico Corporation (HEI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Currently, Leonardo DRS, Inc. has a Zacks Rank of #2 (Buy), while Heico Corporation has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DRS has an improving earnings outlook. However, value investors will care about much more than just this.
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.
DRS currently has a forward P/E ratio of 26.36, while HEI has a forward P/E of 52.70. We also note that DRS has a PEG ratio of 3.09. 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. HEI currently has a PEG ratio of 3.77.
Another notable valuation metric for DRS is its P/B ratio of 2.22. 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, HEI has a P/B of 8.49.
These metrics, and several others, help DRS earn a Value grade of B, while HEI has been given a Value grade of D.
DRS has seen stronger estimate revision activity and sports more attractive valuation metrics than HEI, so it seems like value investors will conclude that DRS is the superior option right now.
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DRS or HEI: Which Is the Better Value Stock Right Now?
Investors with an interest in Aerospace - Defense Equipment stocks have likely encountered both Leonardo DRS, Inc. (DRS - Free Report) and Heico Corporation (HEI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Currently, Leonardo DRS, Inc. has a Zacks Rank of #2 (Buy), while Heico Corporation has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DRS has an improving earnings outlook. However, value investors will care about much more than just this.
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.
DRS currently has a forward P/E ratio of 26.36, while HEI has a forward P/E of 52.70. We also note that DRS has a PEG ratio of 3.09. 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. HEI currently has a PEG ratio of 3.77.
Another notable valuation metric for DRS is its P/B ratio of 2.22. 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, HEI has a P/B of 8.49.
These metrics, and several others, help DRS earn a Value grade of B, while HEI has been given a Value grade of D.
DRS has seen stronger estimate revision activity and sports more attractive valuation metrics than HEI, so it seems like value investors will conclude that DRS is the superior option right now.