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RTX vs. TDY: Which Stock Is the Better Value Option?

Investors with an interest in Aerospace - Defense Equipment stocks have likely encountered both Raytheon Technologies (RTX) and Teledyne Technologies (TDY). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Raytheon Technologies has a Zacks Rank of #2 (Buy), while Teledyne Technologies has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RTX 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.


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.

RTX currently has a forward P/E ratio of 19.38, while TDY has a forward P/E of 23.03. We also note that RTX has a PEG ratio of 2.32. 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. TDY currently has a PEG ratio of 3.40.

Another notable valuation metric for RTX is its P/B ratio of 1.93. 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, TDY has a P/B of 2.52.

Based on these metrics and many more, RTX holds a Value grade of B, while TDY has a Value grade of C.

RTX has seen stronger estimate revision activity and sports more attractive valuation metrics than TDY, so it seems like value investors will conclude that RTX is the superior option right now.

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Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report

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