SSUMY vs. ITT: Which Stock Is the Better Value Option?
Investors with an interest in Diversified Operations stocks have likely encountered both Sumitomo Corp. (SSUMY) and ITT (ITT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Sumitomo Corp. and ITT are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 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.
SSUMY currently has a forward P/E ratio of 8.80, while ITT has a forward P/E of 23.06. We also note that SSUMY has a PEG ratio of 0.61. 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. ITT currently has a PEG ratio of 1.75.
Another notable valuation metric for SSUMY is its P/B ratio of 0.98. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ITT has a P/B of 4.29.
These metrics, and several others, help SSUMY earn a Value grade of A, while ITT has been given a Value grade of C.
Both SSUMY and ITT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SSUMY is the superior value option right now.
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Sumitomo Corp. (SSUMY) : Free Stock Analysis Report
ITT Inc. (ITT) : Free Stock Analysis Report