AIMC vs. PH: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Altra Industrial Motion (AIMC) and Parker-Hannifin (PH). 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.
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, both Altra Industrial Motion and Parker-Hannifin are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle 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.
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.
AIMC currently has a forward P/E ratio of 19.66, while PH has a forward P/E of 21.14. We also note that AIMC has a PEG ratio of 1.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PH currently has a PEG ratio of 1.79.
Another notable valuation metric for AIMC is its P/B ratio of 1.60. 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, PH has a P/B of 4.73.
These are just a few of the metrics contributing to AIMC's Value grade of B and PH's Value grade of C.
Both AIMC and PH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AIMC is the superior value option right now.
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Altra Industrial Motion Corp. (AIMC): Free Stock Analysis Report
ParkerHannifin Corporation (PH): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.