SSUMY or CSL: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Diversified Operations sector have probably already heard of Sumitomo Corp. (SSUMY) and Carlisle (CSL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Sumitomo Corp. and Carlisle are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SSUMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
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.
SSUMY currently has a forward P/E ratio of 7.61, while CSL has a forward P/E of 15.34. We also note that SSUMY has a PEG ratio of 0.99. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CSL currently has a PEG ratio of 1.02.
Another notable valuation metric for SSUMY is its P/B ratio of 1.8. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CSL has a P/B of 8.01.
Based on these metrics and many more, SSUMY holds a Value grade of A, while CSL has a Value grade of C.
SSUMY 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 SSUMY is likely the superior value option right now.
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See Stocks Now >>Sumitomo Corp. (SSUMY) : Free Stock Analysis Report
Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
