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Investors with an interest in Metal Products - Procurement and Fabrication stocks have likely encountered both Norsk Hydro ASA (NHYDY) and Esab (ESAB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Norsk Hydro ASA has a Zacks Rank of #2 (Buy), while Esab 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 NHYDY 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 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.
NHYDY currently has a forward P/E ratio of 9.80, while ESAB has a forward P/E of 26.12. We also note that NHYDY has a PEG ratio of 0.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ESAB currently has a PEG ratio of 2.25.
Another notable valuation metric for NHYDY is its P/B ratio of 1.09. 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, ESAB has a P/B of 4.15.
These are just a few of the metrics contributing to NHYDY's Value grade of A and ESAB's Value grade of D.
NHYDY stands above ESAB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NHYDY is the superior value option right now.
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Norsk Hydro ASA (NHYDY) : Free Stock Analysis Report
ESAB Corporation (ESAB) : Free Stock Analysis Report