Investors with an interest in Metal Products - Procurement and Fabrication stocks have likely encountered both Northwest Pipe Co. (NWPX - Free Report) and TriMas (TRS - 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 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.
Currently, Northwest Pipe Co. has a Zacks Rank of #2 (Buy), while TriMas 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 NWPX has an improving earnings outlook. But this is only part of the picture 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.
NWPX currently has a forward P/E ratio of 13.96, while TRS has a forward P/E of 16.13. We also note that NWPX has a PEG ratio of 1.40. 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. TRS currently has a PEG ratio of 3.23.
Another notable valuation metric for NWPX is its P/B ratio of 1.03. 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, TRS has a P/B of 2.19.
These are just a few of the metrics contributing to NWPX's Value grade of A and TRS's Value grade of C.
NWPX has seen stronger estimate revision activity and sports more attractive valuation metrics than TRS, so it seems like value investors will conclude that NWPX is the superior option right now.