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KUBTY vs. DE: Which Stock Is the Better Value Option?

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Investors interested in Manufacturing - Farm Equipment stocks are likely familiar with Kubota Corp. (KUBTY - Free Report) and Deere (DE - 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.

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 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, Kubota Corp. has a Zacks Rank of #2 (Buy), while Deere has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that KUBTY likely has seen a stronger improvement to its earnings outlook than DE has recently. But this is just one factor that value investors are interested in.

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.

KUBTY currently has a forward P/E ratio of 11.74, while DE has a forward P/E of 37.84. We also note that KUBTY has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DE currently has a PEG ratio of 2.83.

Another notable valuation metric for KUBTY is its P/B ratio of 1.07. 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, DE has a P/B of 6.6.

These metrics, and several others, help KUBTY earn a Value grade of A, while DE has been given a Value grade of F.

KUBTY stands above DE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KUBTY is the superior value option right now.

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