Back to top

Image: Bigstock

MARUY vs. ITT: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Diversified Operations sector might want to consider either Marubeni Corp. (MARUY - Free Report) or ITT (ITT - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Marubeni Corp. and ITT 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

MARUY currently has a forward P/E ratio of 12.42, while ITT has a forward P/E of 23.32. We also note that MARUY has a PEG ratio of 1.63. 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. ITT currently has a PEG ratio of 1.73.

Another notable valuation metric for MARUY is its P/B ratio of 1.64. 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, ITT has a P/B of 3.47.

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

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

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in