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MITSY vs. HON: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Diversified Operations sector might want to consider either Mitsui & Co. (MITSY - Free Report) or Honeywell International Inc. (HON - 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 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.

Currently, Mitsui & Co. has a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MITSY likely has seen a stronger improvement to its earnings outlook than HON has recently. 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 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.

MITSY currently has a forward P/E ratio of 15.25, while HON has a forward P/E of 20.94. We also note that MITSY has a PEG ratio of 2.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HON currently has a PEG ratio of 3.19.

Another notable valuation metric for MITSY is its P/B ratio of 1.79. 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, HON has a P/B of 9.3.

Based on these metrics and many more, MITSY holds a Value grade of B, while HON has a Value grade of D.

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

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