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HLIO or IEX: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors interested in stocks from the Manufacturing - General Industrial sector have probably already heard of Helios Technologies (HLIO) and Idex (IEX). 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.

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.

Currently, both Helios Technologies and Idex are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

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Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

HLIO currently has a forward P/E ratio of 13.60, while IEX has a forward P/E of 22.92. We also note that HLIO has a PEG ratio of 1.13. 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. IEX currently has a PEG ratio of 1.91.

Another notable valuation metric for HLIO is its P/B ratio of 2.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IEX has a P/B of 4.62.

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

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


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Zacks Investment Research