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MARUY vs. ITT: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Diversified Operations sector have probably already heard of Marubeni Corp. (MARUY - Free Report) and ITT (ITT - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Marubeni Corp. has a Zacks Rank of #1 (Strong Buy), while ITT has a Zacks Rank of #2 (Buy) right now. This means that MARUY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

MARUY currently has a forward P/E ratio of 9.19, while ITT has a forward P/E of 25.42. We also note that MARUY has a PEG ratio of 1.42. 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. ITT currently has a PEG ratio of 2.06.

Another notable valuation metric for MARUY is its P/B ratio of 1.35. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ITT has a P/B of 4.99.

These are just a few of the metrics contributing to MARUY's Value grade of A and ITT's Value grade of D.

MARUY has seen stronger estimate revision activity and sports more attractive valuation metrics than ITT, so it seems like value investors will conclude that MARUY is the superior option right now.


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