SIEGY vs. GWW: Which Stock Should Value Investors Buy Now?
SIEGY vs. GWW: Which Stock Is the Better Value Option?
Investors interested in Industrial Services stocks are likely familiar with Siemens AG (SIEGY) and W.W. Grainger (GWW). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Right now, Siemens AG is sporting a Zacks Rank of #2 (Buy), while W.W. Grainger has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SIEGY likely has seen a stronger improvement to its earnings outlook than GWW has recently. 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.
SIEGY currently has a forward P/E ratio of 17.56, while GWW has a forward P/E of 25.35. We also note that SIEGY has a PEG ratio of 1.74. 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. GWW currently has a PEG ratio of 1.95.
Another notable valuation metric for SIEGY is its P/B ratio of 2.40. 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, GWW has a P/B of 12.09.
These metrics, and several others, help SIEGY earn a Value grade of B, while GWW has been given a Value grade of C.
SIEGY stands above GWW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SIEGY is the superior value option right now.
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Siemens AG (SIEGY): Free Stock Analysis Report
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