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Investors interested in Manufacturing - Electronics stocks are likely familiar with AZZ (AZZ) and Emerson Electric (EMR). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Currently, both AZZ and Emerson Electric are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
AZZ currently has a forward P/E ratio of 16.17, while EMR has a forward P/E of 20.27. We also note that AZZ has a PEG ratio of 1.15. 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. EMR currently has a PEG ratio of 2.02.
Another notable valuation metric for AZZ is its P/B ratio of 2.41. 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, EMR has a P/B of 2.50.
These are just a few of the metrics contributing to AZZ's Value grade of A and EMR's Value grade of C.
Both AZZ and EMR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AZZ is the superior value option right now.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
Emerson Electric Co. (EMR) : Free Stock Analysis Report