POWL or KNYJY: Which Is the Better Value Stock Right Now?

Zacks
01-10

Investors interested in stocks from the Manufacturing - Electronics sector have probably already heard of Powell Industries (POWL) and Kone Oyj Unsponsored ADR (KNYJY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Powell Industries and Kone Oyj Unsponsored ADR are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that POWL is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

POWL currently has a forward P/E ratio of 16.75, while KNYJY has a forward P/E of 22.99. We also note that POWL has a PEG ratio of 1.20. 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. KNYJY currently has a PEG ratio of 3.25.

Another notable valuation metric for POWL is its P/B ratio of 5.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, KNYJY has a P/B of 8.93.

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

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

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Powell Industries, Inc. (POWL) : Free Stock Analysis Report

Kone Oyj Unsponsored ADR (KNYJY) : Free Stock Analysis Report

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