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SWRAY vs. ITT: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Swire Pacific (SWRAY - Free Report) and ITT (ITT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Swire Pacific has a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that SWRAY likely has seen a stronger improvement to its earnings outlook than ITT has recently. But this is just one piece of the puzzle for value investors.

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.

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.

SWRAY currently has a forward P/E ratio of 9.29, while ITT has a forward P/E of 23.96. We also note that SWRAY has a PEG ratio of 0.57. 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. ITT currently has a PEG ratio of 1.85.

Another notable valuation metric for SWRAY is its P/B ratio of 0.76. 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, ITT has a P/B of 4.14.

These metrics, and several others, help SWRAY earn a Value grade of A, while ITT has been given a Value grade of D.

SWRAY stands above ITT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SWRAY is the superior value option right now.


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