Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Mistras (MG) and Garmin (GRMN). 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.
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 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.
Both Mistras and Garmin have a Zacks Rank of #1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
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.
MG currently has a forward P/E ratio of 15.90, while GRMN has a forward P/E of 27.33. We also note that MG has a PEG ratio of 0.99. 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. GRMN currently has a PEG ratio of 3.08.
Another notable valuation metric for MG is its P/B ratio of 2.24. 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, GRMN has a P/B of 5.51.
These metrics, and several others, help MG earn a Value grade of B, while GRMN has been given a Value grade of F.
Both MG and GRMN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MG is the superior value option right now.
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Mistras Group Inc (MG): Free Stock Analysis Report
Garmin Ltd. (GRMN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).