Yahoo Finance SKFRY vs. ESAB: Which Stock Is the Better Value Option?
Investors with an interest in Metal Products - Procurement and Fabrication stocks have likely encountered both AB SKF (SKFRY) and Esab (ESAB). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, AB SKF is sporting a Zacks Rank of #1 (Strong Buy), while Esab has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SKFRY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
SKFRY currently has a forward P/E ratio of 12.71, while ESAB has a forward P/E of 19.50. We also note that SKFRY has a PEG ratio of 0.89. 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 1.66.
Another notable valuation metric for SKFRY is its P/B ratio of 1.69. 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 3.44.
These metrics, and several others, help SKFRY earn a Value grade of B, while ESAB has been given a Value grade of C.
SKFRY stands above ESAB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKFRY is the superior value option right now.
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AB SKF (SKFRY) : Free Stock Analysis Report
ESAB Corporation (ESAB) : Free Stock Analysis Report
