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POWL vs. ETN: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Powell Industries (POWL - Free Report) or Eaton (ETN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Powell Industries has a Zacks Rank of #1 (Strong Buy), while Eaton has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that POWL likely has seen a stronger improvement to its earnings outlook than ETN has recently. 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.
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.
POWL currently has a forward P/E ratio of 18.33, while ETN has a forward P/E of 30.23. We also note that POWL has a PEG ratio of 1.31. 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. ETN currently has a PEG ratio of 2.57.
Another notable valuation metric for POWL is its P/B ratio of 4.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ETN has a P/B of 6.49.
These metrics, and several others, help POWL earn a Value grade of B, while ETN has been given a Value grade of D.
POWL stands above ETN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that POWL is the superior value option right now.
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POWL vs. ETN: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Manufacturing - Electronics sector might want to consider either Powell Industries (POWL - Free Report) or Eaton (ETN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Powell Industries has a Zacks Rank of #1 (Strong Buy), while Eaton has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that POWL likely has seen a stronger improvement to its earnings outlook than ETN has recently. 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.
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.
POWL currently has a forward P/E ratio of 18.33, while ETN has a forward P/E of 30.23. We also note that POWL has a PEG ratio of 1.31. 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. ETN currently has a PEG ratio of 2.57.
Another notable valuation metric for POWL is its P/B ratio of 4.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ETN has a P/B of 6.49.
These metrics, and several others, help POWL earn a Value grade of B, while ETN has been given a Value grade of D.
POWL stands above ETN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that POWL is the superior value option right now.