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LXFR vs. NDSN: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Luxfer (LXFR - Free Report) or 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 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.

Right now, Luxfer is sporting a Zacks Rank of #2 (Buy), while Nordson has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LXFR is likely seeing its earnings outlook improve to a greater extent. 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.

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.

LXFR currently has a forward P/E ratio of 13.38, while NDSN has a forward P/E of 26.03. We also note that LXFR has a PEG ratio of 1.91. 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. NDSN currently has a PEG ratio of 2.

Another notable valuation metric for LXFR is its P/B ratio of 1.25. 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, NDSN has a P/B of 5.59.

These are just a few of the metrics contributing to LXFR's Value grade of B and NDSN's Value grade of D.

LXFR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LXFR is likely the superior value option right now.


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Nordson Corporation (NDSN) - free report >>

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