NWPX vs. TRS: Which Stock Is the Better Value Option?
Investors interested in Metal Products - Procurement and Fabrication stocks are likely familiar with Northwest Pipe Co. (NWPX) and TriMas (TRS). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Northwest Pipe Co. has a Zacks Rank of #1 (Strong Buy), while TriMas 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 NWPX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NWPX currently has a forward P/E ratio of 15.03, while TRS has a forward P/E of 16.10. We also note that NWPX has a PEG ratio of 1.50. 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. TRS currently has a PEG ratio of 3.22.
Another notable valuation metric for NWPX is its P/B ratio of 1.11. 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, TRS has a P/B of 2.19.
These metrics, and several others, help NWPX earn a Value grade of A, while TRS has been given a Value grade of C.
NWPX has seen stronger estimate revision activity and sports more attractive valuation metrics than TRS, so it seems like value investors will conclude that NWPX is the superior option right now.
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Northwest Pipe Company (NWPX): Free Stock Analysis Report
TriMas Corporation (TRS): 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.