AIMC vs. PH: Which Stock Is the Better Value Option?
Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Altra Industrial Motion (AIMC) and Parker-Hannifin (PH). 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.
Altra Industrial Motion has a Zacks Rank of #1 (Strong Buy), while Parker-Hannifin has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that AIMC likely has seen a stronger improvement to its earnings outlook than PH has recently. But this is only part of the picture for value investors.
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.
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.
AIMC currently has a forward P/E ratio of 18.76, while PH has a forward P/E of 20.17. We also note that AIMC has a PEG ratio of 1.25. 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. PH currently has a PEG ratio of 1.71.
Another notable valuation metric for AIMC is its P/B ratio of 1.48. 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, PH has a P/B of 4.36.
Based on these metrics and many more, AIMC holds a Value grade of B, while PH has a Value grade of C.
AIMC sticks out from PH in both our Zacks Rank and Style Scores models, so value investors will likely feel that AIMC is the better option right now.
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Altra Industrial Motion Corp. (AIMC) : Free Stock Analysis Report
ParkerHannifin Corporation (PH) : Free Stock Analysis Report
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