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KUBTY vs. LNN: Which Stock Is the Better Value Option?

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Investors interested in Manufacturing - Farm Equipment stocks are likely familiar with Kubota Corp. (KUBTY - Free Report) and Lindsay (LNN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Kubota Corp. is sporting a Zacks Rank of #2 (Buy), while Lindsay has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KUBTY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

KUBTY currently has a forward P/E ratio of 13.68, while LNN has a forward P/E of 19.07. We also note that KUBTY has a PEG ratio of 1.28. 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. LNN currently has a PEG ratio of 1.91.

Another notable valuation metric for KUBTY is its P/B ratio of 1.07. 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, LNN has a P/B of 2.83.

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

KUBTY sticks out from LNN in both our Zacks Rank and Style Scores models, so value investors will likely feel that KUBTY is the better option right now.


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