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ST vs. BMI: Which Stock Is the Better Value Option?

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Investors interested in Instruments - Control stocks are likely familiar with Sensata (ST - Free Report) and Badger Meter (BMI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Sensata has a Zacks Rank of #2 (Buy), while Badger Meter has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ST is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

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.

ST currently has a forward P/E ratio of 14.22, while BMI has a forward P/E of 37.92. We also note that ST has a PEG ratio of 1.33. 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. BMI currently has a PEG ratio of 4.21.

Another notable valuation metric for ST is its P/B ratio of 3.55. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BMI has a P/B of 5.24.

These metrics, and several others, help ST earn a Value grade of B, while BMI has been given a Value grade of D.

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


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Badger Meter, Inc. (BMI) - free report >>

Sensata Technologies Holding N.V. (ST) - free report >>