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CSL or DHR: Which Is the Better Value Stock Right Now?

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Investors with an interest in Diversified Operations stocks have likely encountered both Carlisle (CSL - Free Report) and Danaher (DHR - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Carlisle is sporting a Zacks Rank of #1 (Strong Buy), while Danaher 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 CSL has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

CSL currently has a forward P/E ratio of 16.70, while DHR has a forward P/E of 22.94. We also note that CSL has a PEG ratio of 1.11. 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. DHR currently has a PEG ratio of 2.02.

Another notable valuation metric for CSL is its P/B ratio of 2.62. 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, DHR has a P/B of 2.72.

Based on these metrics and many more, CSL holds a Value grade of B, while DHR has a Value grade of D.

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


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