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LMT vs. HWM: Which Stock Is the Better Value Option?
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Investors with an interest in Aerospace - Defense stocks have likely encountered both Lockheed Martin (LMT - Free Report) and Howmet (HWM - 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.
Lockheed Martin and Howmet are both sporting a Zacks Rank of #2 (Buy) right now. 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 only part of the picture for value investors.
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.
LMT currently has a forward P/E ratio of 19.90, while HWM has a forward P/E of 40.91. We also note that LMT has a PEG ratio of 1.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HWM currently has a PEG ratio of 1.64.
Another notable valuation metric for LMT is its P/B ratio of 14. 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, HWM has a P/B of 15.46.
Based on these metrics and many more, LMT holds a Value grade of B, while HWM has a Value grade of D.
Both LMT and HWM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LMT is the superior value option right now.
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LMT vs. HWM: Which Stock Is the Better Value Option?
Investors with an interest in Aerospace - Defense stocks have likely encountered both Lockheed Martin (LMT - Free Report) and Howmet (HWM - 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.
Lockheed Martin and Howmet are both sporting a Zacks Rank of #2 (Buy) right now. 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 only part of the picture for value investors.
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.
LMT currently has a forward P/E ratio of 19.90, while HWM has a forward P/E of 40.91. We also note that LMT has a PEG ratio of 1.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HWM currently has a PEG ratio of 1.64.
Another notable valuation metric for LMT is its P/B ratio of 14. 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, HWM has a P/B of 15.46.
Based on these metrics and many more, LMT holds a Value grade of B, while HWM has a Value grade of D.
Both LMT and HWM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LMT is the superior value option right now.