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MITSY or ITT: Which Is the Better Value Stock Right Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Mitsui & Co. (MITSY - Free Report) and ITT (ITT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Mitsui & Co. and ITT are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MITSY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MITSY currently has a forward P/E ratio of 12.87, while ITT has a forward P/E of 23.57. We also note that MITSY has a PEG ratio of 0.87. 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. ITT currently has a PEG ratio of 1.59.

Another notable valuation metric for MITSY is its P/B ratio of 1.59. 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, ITT has a P/B of 3.61.

These are just a few of the metrics contributing to MITSY's Value grade of B and ITT's Value grade of C.

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

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