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

Investors interested in Diversified Operations stocks are likely familiar with Crane (CR) and Honeywell (HON). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Crane has a Zacks Rank of #2 (Buy), while Honeywell 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 CR has 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.

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.

CR currently has a forward P/E ratio of 16.69, while HON has a forward P/E of 20.25. We also note that CR has a PEG ratio of 1.74. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HON currently has a PEG ratio of 1.92.

Another notable valuation metric for CR is its P/B ratio of 3.97. 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, HON has a P/B of 6.90.

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

CR stands above HON thanks to its solid earnings outlook, and based on these valuation figures, we also 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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