Investors interested in Automotive - Original Equipment stocks are likely familiar with Continental AG (CTTAY) and Modine (MOD). 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 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, Continental AG has a Zacks Rank of #2 (Buy), while Modine has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CTTAY likely has seen a stronger improvement to its earnings outlook than MOD has recently. But this is only part of the picture for value investors.
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.
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.
CTTAY currently has a forward P/E ratio of 9.71, while MOD has a forward P/E of 28.15. We also note that CTTAY has a PEG ratio of 0.37. 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. MOD currently has a PEG ratio of 0.83.
Another notable valuation metric for CTTAY is its P/B ratio of 0.88. 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, MOD has a P/B of 7.13.
Based on these metrics and many more, CTTAY holds a Value grade of A, while MOD has a Value grade of C.
CTTAY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CTTAY is likely the superior value option right now.
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Today, See These 5 Potential Home Runs >>Continental AG (CTTAY) : Free Stock Analysis Report
Modine Manufacturing Company (MOD) : 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.
