Investors with an interest in Manufacturing - General Industrial stocks have likely encountered both Gorman-Rupp (GRC) and Ingersoll Rand (IR). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Gorman-Rupp has a Zacks Rank of #2 (Buy), while Ingersoll Rand has a Zacks Rank of #3 (Hold). This means that GRC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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.
GRC currently has a forward P/E ratio of 20.98, while IR has a forward P/E of 27.43. We also note that GRC has a PEG ratio of 1.61. 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. IR currently has a PEG ratio of 2.49.
Another notable valuation metric for GRC is its P/B ratio of 2.84. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IR has a P/B of 3.65.
Based on these metrics and many more, GRC holds a Value grade of B, while IR has a Value grade of D.
GRC stands above IR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GRC is the superior value option right now.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpGorman-Rupp Company (The) (GRC) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
