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CW or HXL: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Aerospace - Defense Equipment sector might want to consider either Curtiss-Wright (CW) or Hexcel (HXL). But which of these two companies is the best option for those looking for undervalued stocks? 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.

Right now, Curtiss-Wright is sporting a Zacks Rank of #2 (Buy), while Hexcel has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CW is likely seeing its earnings outlook improve to a greater extent. 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.

CW currently has a forward P/E ratio of 15.60, while HXL has a forward P/E of 17.74. We also note that CW has a PEG ratio of 1.16. 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. HXL currently has a PEG ratio of 2.10.

Another notable valuation metric for CW is its P/B ratio of 2.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HXL has a P/B of 3.39.

These metrics, and several others, help CW earn a Value grade of B, while HXL has been given a Value grade of C.

CW sticks out from HXL in both our Zacks Rank and Style Scores models, so value investors will likely feel that CW is the better option right now.

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Hexcel Corporation (HXL): 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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