Back to top

Image: Bigstock

ENS or ABBNY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Manufacturing - Electronics stocks have likely encountered both EnerSys (ENS - Free Report) and ABB (ABBNY - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

EnerSys and ABB are both sporting a Zacks Rank of #2 (Buy) right now. 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. But this is just one piece of the puzzle for value investors.

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.

ENS currently has a forward P/E ratio of 13.10, while ABBNY has a forward P/E of 25.50. We also note that ENS has a PEG ratio of 0.87. 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. ABBNY currently has a PEG ratio of 1.31.

Another notable valuation metric for ENS is its P/B ratio of 3.25. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ABBNY has a P/B of 10.7.

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

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

Published in