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ENS or ABBNY: Which Is the Better Value Stock Right Now?

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Investors interested in Manufacturing - Electronics stocks are likely familiar with EnerSys (ENS - Free Report) and ABB (ABBNY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, EnerSys is sporting a Zacks Rank of #2 (Buy), while ABB has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ENS has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ENS currently has a forward P/E ratio of 9.40, while ABBNY has a forward P/E of 23. We also note that ENS has a PEG ratio of 0.52. 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. ABBNY currently has a PEG ratio of 2.33.

Another notable valuation metric for ENS is its P/B ratio of 2.02. 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, ABBNY has a P/B of 6.72.

These metrics, and several others, help ENS earn a Value grade of A, while ABBNY has been given a Value grade of C.

ENS sticks out from ABBNY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ENS is the better option right now.


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