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GD or NOC: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Aerospace - Defense sector might want to consider either General Dynamics (GD - Free Report) or Northrop Grumman (NOC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, General Dynamics has a Zacks Rank of #2 (Buy), while Northrop Grumman has a Zacks Rank of #4 (Sell). This means that GD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
GD currently has a forward P/E ratio of 17.20, while NOC has a forward P/E of 19.70. We also note that GD has a PEG ratio of 1.92. 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. NOC currently has a PEG ratio of 8.76.
Another notable valuation metric for GD is its P/B ratio of 3.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NOC has a P/B of 4.50.
These metrics, and several others, help GD earn a Value grade of B, while NOC has been given a Value grade of C.
GD has seen stronger estimate revision activity and sports more attractive valuation metrics than NOC, so it seems like value investors will conclude that GD is the superior option right now.
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GD or NOC: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Aerospace - Defense sector might want to consider either General Dynamics (GD - Free Report) or Northrop Grumman (NOC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, General Dynamics has a Zacks Rank of #2 (Buy), while Northrop Grumman has a Zacks Rank of #4 (Sell). This means that GD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
GD currently has a forward P/E ratio of 17.20, while NOC has a forward P/E of 19.70. We also note that GD has a PEG ratio of 1.92. 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. NOC currently has a PEG ratio of 8.76.
Another notable valuation metric for GD is its P/B ratio of 3.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NOC has a P/B of 4.50.
These metrics, and several others, help GD earn a Value grade of B, while NOC has been given a Value grade of C.
GD has seen stronger estimate revision activity and sports more attractive valuation metrics than NOC, so it seems like value investors will conclude that GD is the superior option right now.