Investors looking for stocks in the Automotive - Original Equipment sector might want to consider either Dana (DAN) or Gentex (GNTX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Dana has a Zacks Rank of #1 (Strong Buy), while Gentex has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DAN 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

DAN currently has a forward P/E ratio of 10.47, while GNTX has a forward P/E of 12.17. We also note that DAN has a PEG ratio of 0.70. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GNTX currently has a PEG ratio of 0.85.

Another notable valuation metric for DAN is its P/B ratio of 1.63. 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, GNTX has a P/B of 2.24.

These metrics, and several others, help DAN earn a Value grade of A, while GNTX has been given a Value grade of C.

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

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Dana Incorporated (DAN) : Free Stock Analysis Report

Gentex Corporation (GNTX) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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