Investors interested in Aerospace - Defense Equipment stocks are likely familiar with Curtiss-Wright (CW - Free Report) and Teledyne Technologies (TDY - 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 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, both Curtiss-Wright and Teledyne Technologies are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CW currently has a forward P/E ratio of 17.57, while TDY has a forward P/E of 31.35. We also note that CW has a PEG ratio of 2.13. 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. TDY currently has a PEG ratio of 4.18.
Another notable valuation metric for CW is its P/B ratio of 3.24. 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, TDY has a P/B of 4.60.
These are just a few of the metrics contributing to CW's Value grade of B and TDY's Value grade of D.
Both CW and TDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CW is the superior value option right now.