We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
TXT vs. LDOS: Which Stock Is the Better Value Option?
Read MoreHide Full Article
Investors with an interest in Aerospace - Defense stocks have likely encountered both Textron (TXT - Free Report) and Leidos (LDOS - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Textron and Leidos are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that TXT likely has seen a stronger improvement to its earnings outlook than LDOS has recently. However, value investors will care about much more than just this.
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.
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.
TXT currently has a forward P/E ratio of 13.61, while LDOS has a forward P/E of 13.89. We also note that TXT has a PEG ratio of 1.08. 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. LDOS currently has a PEG ratio of 1.46.
Another notable valuation metric for TXT is its P/B ratio of 2.34. 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, LDOS has a P/B of 2.85.
Based on these metrics and many more, TXT holds a Value grade of A, while LDOS has a Value grade of C.
TXT stands above LDOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TXT is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
TXT vs. LDOS: Which Stock Is the Better Value Option?
Investors with an interest in Aerospace - Defense stocks have likely encountered both Textron (TXT - Free Report) and Leidos (LDOS - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Textron and Leidos are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that TXT likely has seen a stronger improvement to its earnings outlook than LDOS has recently. However, value investors will care about much more than just this.
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.
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.
TXT currently has a forward P/E ratio of 13.61, while LDOS has a forward P/E of 13.89. We also note that TXT has a PEG ratio of 1.08. 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. LDOS currently has a PEG ratio of 1.46.
Another notable valuation metric for TXT is its P/B ratio of 2.34. 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, LDOS has a P/B of 2.85.
Based on these metrics and many more, TXT holds a Value grade of A, while LDOS has a Value grade of C.
TXT stands above LDOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TXT is the superior value option right now.