BCKIY or HWM: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Engineering - R and D Services sector have probably already heard of Babcock International Group PLC (BCKIY) and Howmet (HWM). 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 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.
Right now, Babcock International Group PLC is sporting a Zacks Rank of #2 (Buy), while Howmet has a Zacks Rank of #3 (Hold). This means that BCKIY'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 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.
BCKIY currently has a forward P/E ratio of 12.81, while HWM has a forward P/E of 34.03. We also note that BCKIY has a PEG ratio of 0.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HWM currently has a PEG ratio of 1.48.
Another notable valuation metric for BCKIY is its P/B ratio of 7.54. 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, HWM has a P/B of 8.24.
These are just a few of the metrics contributing to BCKIY's Value grade of B and HWM's Value grade of D.
BCKIY sticks out from HWM in both our Zacks Rank and Style Scores models, so value investors will likely feel that BCKIY is the better option right now.
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Babcock International Group PLC (BCKIY) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report