Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Oshkosh (OSK) and Wabco Holdings (WBC). 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Oshkosh is sporting a Zacks Rank of #2 (Buy), while Wabco Holdings has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that OSK likely has seen a stronger improvement to its earnings outlook than WBC 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.
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.
OSK currently has a forward P/E ratio of 10.23, while WBC has a forward P/E of 17.98. We also note that OSK has a PEG ratio of 0.90. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WBC currently has a PEG ratio of 1.20.
Another notable valuation metric for OSK is its P/B ratio of 2.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WBC has a P/B of 5.78.
These metrics, and several others, help OSK earn a Value grade of B, while WBC has been given a Value grade of C.
OSK stands above WBC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OSK is the superior value option right now.
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Oshkosh Corporation (OSK) : Free Stock Analysis Report
Wabco Holdings Inc. (WBC) : Free Stock Analysis Report
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