Investors with an interest in Manufacturing - Electronics stocks have likely encountered both Powell Industries (POWL) and Eaton (ETN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Powell Industries has a Zacks Rank of #2 (Buy), while Eaton has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that POWL has an improving earnings outlook. But this is just one piece of the puzzle 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.

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.

POWL currently has a forward P/E ratio of 19.96, while ETN has a forward P/E of 34.89. We also note that POWL has a PEG ratio of 1.43. 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. ETN currently has a PEG ratio of 2.99.

Another notable valuation metric for POWL is its P/B ratio of 6.96. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ETN has a P/B of 7.77.

These are just a few of the metrics contributing to POWL's Value grade of B and ETN's Value grade of D.

POWL stands above ETN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that POWL is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Eaton Corporation, PLC (ETN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research