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MITSY vs. ITT: Which Stock Is the Better Value Option?

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Investors interested in Diversified Operations stocks are likely familiar with Mitsui & Co. (MITSY - Free Report) and ITT (ITT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Mitsui & Co. and ITT are sporting a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

MITSY currently has a forward P/E ratio of 12.62, while ITT has a forward P/E of 24.41. We also note that MITSY has a PEG ratio of 1.10. 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. ITT currently has a PEG ratio of 1.65.

Another notable valuation metric for MITSY is its P/B ratio of 1.49. 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, ITT has a P/B of 3.74.

These metrics, and several others, help MITSY earn a Value grade of A, while ITT has been given a Value grade of C.

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

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