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

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Investors with an interest in Diversified Operations stocks have likely encountered both Mitsui & Co. (MITSY - Free Report) and Hitachi Ltd. (HTHIY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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 Hitachi Ltd. 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 HTHIY 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 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.

MITSY currently has a forward P/E ratio of 13.39, while HTHIY has a forward P/E of 24.67. We also note that MITSY has a PEG ratio of 1.16. 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. HTHIY currently has a PEG ratio of 1.41.

Another notable valuation metric for MITSY is its P/B ratio of 1.51. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HTHIY has a P/B of 3.46.

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

MITSY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MITSY is likely the superior value option right now.

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