Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of Nidec Corp. (NJDCY) and BWX Technologies (BWXT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, both Nidec Corp. and BWX Technologies are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
NJDCY currently has a forward P/E ratio of 15.86, while BWXT has a forward P/E of 37.96. We also note that NJDCY has a PEG ratio of 0.47. 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. BWXT currently has a PEG ratio of 4.11.
Another notable valuation metric for NJDCY is its P/B ratio of 4.03. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BWXT has a P/B of 10.59.
These are just a few of the metrics contributing to NJDCY's Value grade of B and BWXT's Value grade of D.
Both NJDCY and BWXT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NJDCY is the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpNidec Corp. (NJDCY) : Free Stock Analysis Report
BWX Technologies, Inc. (BWXT) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
