Yahoo Finance FUL vs. HWKN: Which Stock Is the Better Value Option?
Investors interested in stocks from the Chemical - Specialty sector have probably already heard of H. B. Fuller (FUL) and Hawkins (HWKN). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, H. B. Fuller is sporting a Zacks Rank of #2 (Buy), while Hawkins has a Zacks Rank of #4 (Sell). This means that FUL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FUL currently has a forward P/E ratio of 17.63, while HWKN has a forward P/E of 24.31. We also note that FUL has a PEG ratio of 1.21. 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. HWKN currently has a PEG ratio of 4.05.
Another notable valuation metric for FUL is its P/B ratio of 2.35. 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, HWKN has a P/B of 4.60.
Based on these metrics and many more, FUL holds a Value grade of B, while HWKN has a Value grade of D.
FUL stands above HWKN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FUL is the superior value option right now.
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H. B. Fuller Company (FUL) : Free Stock Analysis Report
Hawkins, Inc. (HWKN) : Free Stock Analysis Report
