Back to top

CFX vs. GTLS: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Manufacturing - General Industrial stocks are likely familiar with Colfax (CFX - Free Report) and Chart Industries (GTLS - 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.

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.

Currently, Colfax has a Zacks Rank of #2 (Buy), while Chart Industries has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CFX has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CFX currently has a forward P/E ratio of 8.83, while GTLS has a forward P/E of 30.03. We also note that CFX has a PEG ratio of 0.63. 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. GTLS currently has a PEG ratio of 1.04.

Another notable valuation metric for CFX is its P/B ratio of 0.67. 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, GTLS has a P/B of 2.28.

These are just a few of the metrics contributing to CFX's Value grade of A and GTLS's Value grade of D.

CFX has seen stronger estimate revision activity and sports more attractive valuation metrics than GTLS, so it seems like value investors will conclude that CFX is the superior option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Colfax Corporation (CFX) - free report >>

Chart Industries, Inc. (GTLS) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in