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TEL vs. BWXT: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both TE Connectivity (TEL - Free Report) and BWX Technologies (BWXT - 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, TE Connectivity is sporting a Zacks Rank of #2 (Buy), while BWX Technologies has a Zacks Rank of #3 (Hold). This means that TEL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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.

TEL currently has a forward P/E ratio of 16.86, while BWXT has a forward P/E of 24.26. We also note that TEL has a PEG ratio of 1.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BWXT currently has a PEG ratio of 2.21.

Another notable valuation metric for TEL is its P/B ratio of 3.47. 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, BWXT has a P/B of 17.92.

Based on these metrics and many more, TEL holds a Value grade of A, while BWXT has a Value grade of D.

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


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TE Connectivity Ltd. (TEL) - free report >>

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