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CR vs. HON: Which Stock Is the Better Value Option?

Investors interested in stocks from the Diversified Operations sector have probably already heard of Crane (CR) and Honeywell (HON). But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Crane and Honeywell are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

CR currently has a forward P/E ratio of 15.20, while HON has a forward P/E of 18.96. We also note that CR has a PEG ratio of 1.47. 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. HON currently has a PEG ratio of 2.04.

Another notable valuation metric for CR is its P/B ratio of 3.52. 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, HON has a P/B of 6.39.

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

Both CR and HON are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CR is the superior value option right now.

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Crane Company (CR): Free Stock Analysis Report

Honeywell International Inc. (HON): 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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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