Back to top

Image: Bigstock

LXFR vs. XYL: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Luxfer (LXFR - Free Report) or Xylem (XYL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Luxfer and Xylem are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LXFR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

LXFR currently has a forward P/E ratio of 15.12, while XYL has a forward P/E of 44.21. We also note that LXFR has a PEG ratio of 1.16. 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. XYL currently has a PEG ratio of 4.42.

Another notable valuation metric for LXFR is its P/B ratio of 2.19. 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, XYL has a P/B of 4.04.

These are just a few of the metrics contributing to LXFR's Value grade of B and XYL's Value grade of D.

LXFR has seen stronger estimate revision activity and sports more attractive valuation metrics than XYL, so it seems like value investors will conclude that LXFR is the superior option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Luxfer Holdings PLC (LXFR) - free report >>

Xylem Inc. (XYL) - free report >>

Published in