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GRC vs. TRMB: 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 Gorman-Rupp (GRC - Free Report) or Trimble Navigation (TRMB - 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.

Gorman-Rupp has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GRC 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

GRC currently has a forward P/E ratio of 20.97, while TRMB has a forward P/E of 27.06. We also note that GRC has a PEG ratio of 1.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TRMB currently has a PEG ratio of 2.71.

Another notable valuation metric for GRC is its P/B ratio of 2.83. 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, TRMB has a P/B of 3.39.

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

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


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