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Investors looking for stocks in the Diversified Operations sector might want to consider either Marubeni Corp. (MARUY) or Honeywell International Inc. (HON). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Marubeni Corp. has a Zacks Rank of #2 (Buy), while Honeywell International Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MARUY has an improving earnings outlook. But this is only part of the picture for value investors.
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.
MARUY currently has a forward P/E ratio of 7.69, while HON has a forward P/E of 20.06. We also note that MARUY has a PEG ratio of 1.15. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HON currently has a PEG ratio of 2.31.
Another notable valuation metric for MARUY is its P/B ratio of 1.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HON has a P/B of 7.54.
These metrics, and several others, help MARUY earn a Value grade of A, while HON has been given a Value grade of D.
MARUY sticks out from HON in both our Zacks Rank and Style Scores models, so value investors will likely feel that MARUY is the better option right now.
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Marubeni Corp. (MARUY) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report