Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both DXP Enterprises (DXPE - Free Report) and Barnes Group (B - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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.
Currently, DXP Enterprises has a Zacks Rank of #2 (Buy), while Barnes Group has a Zacks Rank of #4 (Sell). This means that DXPE'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 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 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.
DXPE currently has a forward P/E ratio of 14.52, while B has a forward P/E of 16.86. We also note that DXPE has a PEG ratio of 0.83. 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. B currently has a PEG ratio of 2.41.
Another notable valuation metric for DXPE is its P/B ratio of 1.91. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, B has a P/B of 2.28.
Based on these metrics and many more, DXPE holds a Value grade of B, while B has a Value grade of C.
DXPE stands above B thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DXPE is the superior value option right now.