Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both Littelfuse (LFUS) and BWX Technologies (BWXT). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Littelfuse and BWX Technologies have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.
LFUS currently has a forward P/E ratio of 27.67, while BWXT has a forward P/E of 34.71. We also note that LFUS has a PEG ratio of 2.31. 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. BWXT currently has a PEG ratio of 3.76.
Another notable valuation metric for LFUS is its P/B ratio of 2.26. 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, BWXT has a P/B of 9.68.
These are just a few of the metrics contributing to LFUS's Value grade of B and BWXT's Value grade of D.
Both LFUS and BWXT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LFUS is the superior value option right now.
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