Yahoo Finance FERG vs. ATLKY: Which Stock Is the Better Value Option?
Investors interested in Manufacturing - General Industrial stocks are likely familiar with Ferguson plc (FERG) and Atlas Copco AB (ATLKY). 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Ferguson plc has a Zacks Rank of #2 (Buy), while Atlas Copco AB 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 FERG 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 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.
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.
FERG currently has a forward P/E ratio of 15.66, while ATLKY has a forward P/E of 24.40. We also note that FERG has a PEG ratio of 2.69. 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. ATLKY currently has a PEG ratio of 3.10.
Another notable valuation metric for FERG is its P/B ratio of 6.60. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ATLKY has a P/B of 7.36.
These are just a few of the metrics contributing to FERG's Value grade of B and ATLKY's Value grade of D.
FERG 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 FERG is likely the superior value option right now.
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Ferguson plc (FERG) : Free Stock Analysis Report
Atlas Copco AB (ATLKY) : Free Stock Analysis Report
