SKFRY vs. ESAB: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Metal Products - Procurement and Fabrication sector have probably already heard of AB SKF (SKFRY) and Esab (ESAB). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
AB SKF and Esab are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that SKFRY likely has seen a stronger improvement to its earnings outlook than ESAB has recently. But this is only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SKFRY currently has a forward P/E ratio of 12.30, while ESAB has a forward P/E of 23.59. We also note that SKFRY has a PEG ratio of 1.18. 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. ESAB currently has a PEG ratio of 1.98.
Another notable valuation metric for SKFRY is its P/B ratio of 1.60. 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 3.94.
These metrics, and several others, help SKFRY earn a Value grade of A, while ESAB has been given a Value grade of D.
SKFRY has seen stronger estimate revision activity and sports more attractive valuation metrics than ESAB, so it seems like value investors will conclude that SKFRY is the superior option right now.
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AB SKF (SKFRY) : Free Stock Analysis Report
ESAB Corporation (ESAB) : Free Stock Analysis Report