Back to top

Image: Bigstock

PLOW or KNRRY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Automotive - Replacement Parts stocks have likely encountered both Douglas Dynamics (PLOW - Free Report) and Knorr-Bremse - Unsponsored ADR (KNRRY - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Douglas Dynamics has a Zacks Rank of #2 (Buy), while Knorr-Bremse - Unsponsored ADR has a Zacks Rank of #5 (Strong Sell) right now. This means that PLOW's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

PLOW currently has a forward P/E ratio of 12.30, while KNRRY has a forward P/E of 24.22. We also note that PLOW has a PEG ratio of 0.77. 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. KNRRY currently has a PEG ratio of 0.95.

Another notable valuation metric for PLOW is its P/B ratio of 3.03. 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, KNRRY has a P/B of 4.73.

These are just a few of the metrics contributing to PLOW's Value grade of A and KNRRY's Value grade of C.

PLOW sticks out from KNRRY in both our Zacks Rank and Style Scores models, so value investors will likely feel that PLOW is the better option right now.

Published in