POWL vs. KNYJY: Which Stock Should Value Investors Buy Now?

Investors interested in Manufacturing - Electronics stocks are likely familiar with Powell Industries POWL and Kone Oyj Unsponsored ADR KNYJY. But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Powell Industries and Kone Oyj Unsponsored ADR are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

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.

POWL currently has a forward P/E ratio of 15.60, while KNYJY has a forward P/E of 22.35. We also note that POWL has a PEG ratio of 1.11. 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. KNYJY currently has a PEG ratio of 2.61.

Another notable valuation metric for POWL is its P/B ratio of 4.29. 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, KNYJY has a P/B of 11.66.

These metrics, and several others, help POWL earn a Value grade of A, while KNYJY has been given a Value grade of C.

Both POWL and KNYJY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that POWL is the superior value option right now.

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