NHYDY vs. ESAB: Which Stock Is the Better Value Option?
Investors interested in stocks from the Metal Products - Procurement and Fabrication sector have probably already heard of Norsk Hydro ASA (NHYDY) and Esab (ESAB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, Norsk Hydro ASA is sporting a Zacks Rank of #2 (Buy), while Esab has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NHYDY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
NHYDY currently has a forward P/E ratio of 10.88, while ESAB has a forward P/E of 20.54. We also note that NHYDY has a PEG ratio of 0.70. 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. ESAB currently has a PEG ratio of 2.02.
Another notable valuation metric for NHYDY is its P/B ratio of 1.08. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ESAB has a P/B of 3.62.
Based on these metrics and many more, NHYDY holds a Value grade of A, while ESAB has a Value grade of C.
NHYDY has seen stronger estimate revision activity and sports more attractive valuation metrics than ESAB, so it seems like value investors will conclude that NHYDY is the superior option right now.
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Norsk Hydro ASA (NHYDY) : Free Stock Analysis Report
ESAB Corporation (ESAB) : Free Stock Analysis Report
