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AGCO vs. DE: Which Stock Should Value Investors Buy Now?

Investors with an interest in Manufacturing - Farm Equipment stocks have likely encountered both Agco (AGCO) and Deere (DE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Agco and Deere have a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

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.

AGCO currently has a forward P/E ratio of 18.16, while DE has a forward P/E of 29.19. We also note that AGCO has a PEG ratio of 2.09. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DE currently has a PEG ratio of 3.57.

Another notable valuation metric for AGCO is its P/B ratio of 1.95. 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, DE has a P/B of 5.26.

These metrics, and several others, help AGCO earn a Value grade of B, while DE has been given a Value grade of F.

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


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AGCO Corporation (AGCO): Free Stock Analysis Report
 
Deere Company (DE): Free Stock Analysis Report
 
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