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KMT vs. LECO: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Manufacturing - Tools & Related Products sector have probably already heard of Kennametal (KMT - Free Report) and Lincoln Electric Holdings (LECO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Kennametal has a Zacks Rank of #1 (Strong Buy), while Lincoln Electric Holdings has a Zacks Rank of #3 (Hold). This means that KMT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
KMT currently has a forward P/E ratio of 16.85, while LECO has a forward P/E of 24.33. We also note that KMT has a PEG ratio of 0.64. 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. LECO currently has a PEG ratio of 1.62.
Another notable valuation metric for KMT is its P/B ratio of 2.1. 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, LECO has a P/B of 9.76.
Based on these metrics and many more, KMT holds a Value grade of B, while LECO has a Value grade of D.
KMT sticks out from LECO in both our Zacks Rank and Style Scores models, so value investors will likely feel that KMT is the better option right now.
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KMT vs. LECO: Which Stock Is the Better Value Option?
Investors interested in stocks from the Manufacturing - Tools & Related Products sector have probably already heard of Kennametal (KMT - Free Report) and Lincoln Electric Holdings (LECO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Kennametal has a Zacks Rank of #1 (Strong Buy), while Lincoln Electric Holdings has a Zacks Rank of #3 (Hold). This means that KMT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
KMT currently has a forward P/E ratio of 16.85, while LECO has a forward P/E of 24.33. We also note that KMT has a PEG ratio of 0.64. 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. LECO currently has a PEG ratio of 1.62.
Another notable valuation metric for KMT is its P/B ratio of 2.1. 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, LECO has a P/B of 9.76.
Based on these metrics and many more, KMT holds a Value grade of B, while LECO has a Value grade of D.
KMT sticks out from LECO in both our Zacks Rank and Style Scores models, so value investors will likely feel that KMT is the better option right now.