Subscribe to Entrepreneur for $5
Subscribe

SIEGY vs. GWW: Which Stock Should Value Investors Buy Now?

SIEGY vs. GWW: Which Stock Is the Better Value Option?

By
This story originally appeared on Zacks

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.

- Zacks

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.



Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.

See these 7 breakthrough stocks 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

 

Siemens AG (SIEGY): Free Stock Analysis Report

 

W.W. Grainger, Inc. (GWW): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research