KE vs. MAIR: Which Stock Should Value Investors Buy Now?

Investors with an interest in Electronics - Miscellaneous Products stocks have likely encountered both Kimball Electronics (KE) and Madison Air Solutions Corporation (MAIR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Kimball Electronics has a Zacks Rank of #2 (Buy), while Madison Air Solutions Corporation has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that KE likely has seen a stronger improvement to its earnings outlook than MAIR has recently. But this is only part of the picture 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 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.

KE currently has a forward P/E ratio of 17.26, while MAIR has a forward P/E of 21.89. We also note that KE has a PEG ratio of 0.86. 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. MAIR currently has a PEG ratio of 1.12.

Another notable valuation metric for KE is its P/B ratio of 1.12. 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, MAIR has a P/B of 3.2.

Based on these metrics and many more, KE holds a Value grade of A, while MAIR has a Value grade of D.

KE sticks out from MAIR in both our Zacks Rank and Style Scores models, so value investors will likely feel that KE is the better 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 innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research