Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Daikin Industries (DKILY - Free Report) or Garmin (GRMN - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Daikin Industries and Garmin are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

DKILY currently has a forward P/E ratio of 16.49, while GRMN has a forward P/E of 22.33. We also note that DKILY has a PEG ratio of 1.78. 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. GRMN currently has a PEG ratio of 1.97.

Another notable valuation metric for DKILY is its P/B ratio of 1.64. 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, GRMN has a P/B of 4.43.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Garmin Ltd. (GRMN) - free report >>

Daikin Industries (DKILY) - free report >>

Published in