News

We provide the latest news
from the world of economics and finance

Back
05 June
FLS or NDSN: Which Is the Better Value Stock Right Now?

Investors interested in Manufacturing - General Industrial stocks are likely familiar with Flowserve (FLS) and Nordson (NDSN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Flowserve and Nordson are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that FLS likely has seen a stronger improvement to its earnings outlook than NDSN has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

FLS currently has a forward P/E ratio of 18.06, while NDSN has a forward P/E of 23.60. We also note that FLS has a PEG ratio of 1.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NDSN currently has a PEG ratio of 1.82.

Another notable valuation metric for FLS is its P/B ratio of 3.17. 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, NDSN has a P/B of 4.68.

These are just a few of the metrics contributing to FLS's Value grade of B and NDSN's Value grade of D.

FLS stands above NDSN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FLS is the superior value option right now.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.

See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Flowserve Corporation (FLS) : Free Stock Analysis Report

Nordson Corporation (NDSN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.