Yahoo Finance ENS vs. ZWS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of EnerSys (ENS) and Zurn Water (ZWS). 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.
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 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.
Right now, both EnerSys and Zurn Water are sporting a Zacks Rank of # 2 (Buy). 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ENS currently has a forward P/E ratio of 11.81, while ZWS has a forward P/E of 26.12. We also note that ENS has a PEG ratio of 0.66. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZWS currently has a PEG ratio of 1.60.
Another notable valuation metric for ENS is its P/B ratio of 2.37. 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, ZWS has a P/B of 3.29.
Based on these metrics and many more, ENS holds a Value grade of A, while ZWS has a Value grade of C.
Both ENS and ZWS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ENS is the superior value option right now.
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Enersys (ENS) : Free Stock Analysis Report
Zurn Elkay Water Solutions Cor (ZWS) : Free Stock Analysis Report
