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KMT vs. LECO: Which Stock Is the Better Value Option?
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Investors interested in Manufacturing - Tools & Related Products stocks are likely familiar with Kennametal (KMT - Free Report) and Lincoln Electric Holdings (LECO - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 #2 (Buy). Investors should feel comfortable knowing that KMT likely has seen a stronger improvement to its earnings outlook than LECO has recently. But this is only part of the picture for value investors.
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.
KMT currently has a forward P/E ratio of 6.42, while LECO has a forward P/E of 22.73. We also note that KMT has a PEG ratio of 0.30. 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. LECO currently has a PEG ratio of 1.52.
Another notable valuation metric for KMT is its P/B ratio of 1.38. 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, LECO has a P/B of 8.9.
These metrics, and several others, help KMT earn a Value grade of A, while LECO has been given a Value grade of D.
KMT 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 KMT is likely the superior value option right now.
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KMT vs. LECO: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - Tools & Related Products stocks are likely familiar with Kennametal (KMT - Free Report) and Lincoln Electric Holdings (LECO - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 #2 (Buy). Investors should feel comfortable knowing that KMT likely has seen a stronger improvement to its earnings outlook than LECO has recently. But this is only part of the picture for value investors.
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.
KMT currently has a forward P/E ratio of 6.42, while LECO has a forward P/E of 22.73. We also note that KMT has a PEG ratio of 0.30. 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. LECO currently has a PEG ratio of 1.52.
Another notable valuation metric for KMT is its P/B ratio of 1.38. 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, LECO has a P/B of 8.9.
These metrics, and several others, help KMT earn a Value grade of A, while LECO has been given a Value grade of D.
KMT 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 KMT is likely the superior value option right now.