TNC or NDSN: Which Is the Better Value Stock Right Now?

Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Tennant (TNC) and Nordson (NDSN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Currently, Tennant has a Zacks Rank of #1 (Strong Buy), while Nordson has a Zacks Rank of #2 (Buy). This means that TNC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

TNC currently has a forward P/E ratio of 24.82, while NDSN has a forward P/E of 36.49. We also note that TNC has a PEG ratio of 2.48. 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. NDSN currently has a PEG ratio of 2.81.

Another notable valuation metric for TNC is its P/B ratio of 3.30. 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, NDSN has a P/B of 6.85.

These metrics, and several others, help TNC earn a Value grade of B, while NDSN has been given a Value grade of D.

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

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Tennant Company (TNC) : Free Stock Analysis Report
 
Nordson Corporation (NDSN) : Free Stock Analysis Report
 
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