FLS or NDSN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Manufacturing - General Industrial sector might want to consider either Flowserve (FLS) or Nordson (NDSN). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Flowserve has a Zacks Rank of #2 (Buy), while Nordson 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 FLS is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
FLS currently has a forward P/E ratio of 18.58, while NDSN has a forward P/E of 27.41. We also note that FLS has a PEG ratio of 1.23. 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. NDSN currently has a PEG ratio of 2.11.
Another notable valuation metric for FLS is its P/B ratio of 3.35. 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, NDSN has a P/B of 5.24.
These metrics, and several others, help FLS earn a Value grade of B, while NDSN has been given a Value grade of D.
FLS 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 FLS is likely the superior value option right now.
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Flowserve Corporation (FLS) : Free Stock Analysis Report
Nordson Corporation (NDSN) : Free Stock Analysis Report