HAYW or HOCPY: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Electronics - Miscellaneous Products sector have probably already heard of Hayward Holdings, Inc. (HAYW) and Hoya Corp. (HOCPY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Hayward Holdings, Inc. and Hoya Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that HAYW's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

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.

HAYW currently has a forward P/E ratio of 17.79, while HOCPY has a forward P/E of 32.78. We also note that HAYW has a PEG ratio of 1.42. 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. HOCPY currently has a PEG ratio of 3.70.

Another notable valuation metric for HAYW is its P/B ratio of 2.05. 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, HOCPY has a P/B of 7.91.

Based on these metrics and many more, HAYW holds a Value grade of B, while HOCPY has a Value grade of D.

HAYW sticks out from HOCPY in both our Zacks Rank and Style Scores models, so value investors will likely feel that HAYW is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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