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GD or HWM: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Aerospace - Defense sector have probably already heard of General Dynamics (GD - Free Report) and Howmet (HWM - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both General Dynamics and Howmet are sporting a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
GD currently has a forward P/E ratio of 21.83, while HWM has a forward P/E of 48.46. We also note that GD has a PEG ratio of 2.14. 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. HWM currently has a PEG ratio of 2.33.
Another notable valuation metric for GD is its P/B ratio of 3.73. 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, HWM has a P/B of 17.79.
Based on these metrics and many more, GD holds a Value grade of B, while HWM has a Value grade of F.
Both GD and HWM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GD is the superior value option right now.
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GD or HWM: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Aerospace - Defense sector have probably already heard of General Dynamics (GD - Free Report) and Howmet (HWM - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both General Dynamics and Howmet are sporting a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
GD currently has a forward P/E ratio of 21.83, while HWM has a forward P/E of 48.46. We also note that GD has a PEG ratio of 2.14. 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. HWM currently has a PEG ratio of 2.33.
Another notable valuation metric for GD is its P/B ratio of 3.73. 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, HWM has a P/B of 17.79.
Based on these metrics and many more, GD holds a Value grade of B, while HWM has a Value grade of F.
Both GD and HWM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GD is the superior value option right now.