Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Daktronics (DAKT) and Garmin (GRMN). 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 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, Daktronics is sporting a Zacks Rank of #2 (Buy), while Garmin 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 DAKT 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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
DAKT currently has a forward P/E ratio of 16.10, while GRMN has a forward P/E of 31.22. We also note that DAKT has a PEG ratio of 0.64. 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. GRMN currently has a PEG ratio of 3.52.
Another notable valuation metric for DAKT is its P/B ratio of 3.13. 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, GRMN has a P/B of 6.36.
These metrics, and several others, help DAKT earn a Value grade of A, while GRMN has been given a Value grade of D.
DAKT stands above GRMN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DAKT is the superior value option right now.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpDaktronics, Inc. (DAKT) : Free Stock Analysis Report
Garmin Ltd. (GRMN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
