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MARUY or HON: Which Is the Better Value Stock Right Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Marubeni Corp. (MARUY - Free Report) and Honeywell International Inc. (HON - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Marubeni Corp. and Honeywell International Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that MARUY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MARUY currently has a forward P/E ratio of 11.06, while HON has a forward P/E of 19.39. We also note that MARUY has a PEG ratio of 1.77. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HON currently has a PEG ratio of 2.29.

Another notable valuation metric for MARUY is its P/B ratio of 1.62. 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, HON has a P/B of 7.79.

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

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


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