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SXI vs. FLS: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Manufacturing - General Industrial stocks are likely familiar with Standex International (SXI) and Flowserve (FLS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Standex International has a Zacks Rank of #2 (Buy), while Flowserve has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that SXI likely has seen a stronger improvement to its earnings outlook than FLS has recently. But this is only part of the picture 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.

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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.

SXI currently has a forward P/E ratio of 12.65, while FLS has a forward P/E of 19.10. We also note that SXI has a PEG ratio of 0.90. 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. FLS currently has a PEG ratio of 1.17.

Another notable valuation metric for SXI is its P/B ratio of 1.97. 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, FLS has a P/B of 2.10.

Based on these metrics and many more, SXI holds a Value grade of B, while FLS has a Value grade of C.

SXI sticks out from FLS in both our Zacks Rank and Style Scores models, so value investors will likely feel that SXI is the better option right now.


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Standex International Corporation (SXI) : Free Stock Analysis Report
 
Flowserve Corporation (FLS) : Free Stock Analysis Report
 
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Zacks Investment Research