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TXT or RTX: Which Is the Better Value Stock Right Now?
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Investors interested in Aerospace - Defense stocks are likely familiar with Textron (TXT - Free Report) and RTX (RTX - Free Report) . 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.
Textron and RTX are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that TXT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
TXT currently has a forward P/E ratio of 14.19, while RTX has a forward P/E of 21.78. We also note that TXT has a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RTX currently has a PEG ratio of 2.09.
Another notable valuation metric for TXT is its P/B ratio of 2.43. 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, RTX has a P/B of 2.61.
These metrics, and several others, help TXT earn a Value grade of A, while RTX has been given a Value grade of C.
TXT sticks out from RTX in both our Zacks Rank and Style Scores models, so value investors will likely feel that TXT is the better option right now.
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TXT or RTX: Which Is the Better Value Stock Right Now?
Investors interested in Aerospace - Defense stocks are likely familiar with Textron (TXT - Free Report) and RTX (RTX - Free Report) . 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.
Textron and RTX are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that TXT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
TXT currently has a forward P/E ratio of 14.19, while RTX has a forward P/E of 21.78. We also note that TXT has a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RTX currently has a PEG ratio of 2.09.
Another notable valuation metric for TXT is its P/B ratio of 2.43. 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, RTX has a P/B of 2.61.
These metrics, and several others, help TXT earn a Value grade of A, while RTX has been given a Value grade of C.
TXT sticks out from RTX in both our Zacks Rank and Style Scores models, so value investors will likely feel that TXT is the better option right now.