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DKILY vs. KLAC: Which Stock Is the Better Value Option?

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Investors with an interest in Electronics - Miscellaneous Products stocks have likely encountered both Daikin Industries (DKILY - Free Report) and KLA (KLAC - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.

Both Daikin Industries and KLA have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DKILY currently has a forward P/E ratio of 26.58, while KLAC has a forward P/E of 26.69. We also note that DKILY has a PEG ratio of 2.86. 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. KLAC currently has a PEG ratio of 3.93.

Another notable valuation metric for DKILY is its P/B ratio of 2.70. 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, KLAC has a P/B of 28.15.

Based on these metrics and many more, DKILY holds a Value grade of B, while KLAC has a Value grade of C.

Both DKILY and KLAC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DKILY is the superior value option right now.


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