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FLS vs. NDSN: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Flowserve (FLS - Free Report) or Nordson (NDSN - 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.

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.

Right now, both Flowserve and Nordson are sporting a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

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.

FLS currently has a forward P/E ratio of 14.55, while NDSN has a forward P/E of 22.50. We also note that FLS has a PEG ratio of 1.00. 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. NDSN currently has a PEG ratio of 1.73.

Another notable valuation metric for FLS is its P/B ratio of 2.82. 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, NDSN has a P/B of 4.3.

These are just a few of the metrics contributing to FLS's Value grade of B and NDSN's Value grade of C.

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


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