TTNDY vs. LECO: Which Stock Is the Better Value Option?

Investors looking for stocks in the Manufacturing - Tools & Related Products sector might want to consider either Techtronic Industries Co. (TTNDY) or Lincoln Electric Holdings (LECO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Currently, Techtronic Industries Co. has a Zacks Rank of #2 (Buy), while Lincoln Electric Holdings has a Zacks Rank of #3 (Hold). This means that TTNDY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

TTNDY currently has a forward P/E ratio of 18.86, while LECO has a forward P/E of 24.74. We also note that TTNDY has a PEG ratio of 1.02. 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. LECO currently has a PEG ratio of 1.65.

Another notable valuation metric for TTNDY is its P/B ratio of 3.82. 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, LECO has a P/B of 9.66.

These are just a few of the metrics contributing to TTNDY's Value grade of B and LECO's Value grade of D.

TTNDY has seen stronger estimate revision activity and sports more attractive valuation metrics than LECO, so it seems like value investors will conclude that TTNDY is the superior option right now.

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

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