Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Electrical Components & Equipment industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Electrical Components & Equipment Stock News

Before choosing which top Electrical Components & Equipment stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

Our fundamental outlook for the Electrical Components & Equipment industry remains neutral. The industry consists largely of companies that produce electric cables and wires, electrical equipment, transformers, motors and generators, wiring devices, power supply systems, fuel cells, lighting, and solar power systems. Valuations for the group are currently more in line with historical averages following share price recovery from sharp declines early in 2020 due to macroeconomic uncertainty from numerous headwinds, including the still-evolving total impact of Covid-19. We forecast that the industry results will show more material recovery in 2022, when we expect some headwinds created by recovery to abate. We anticipate growth to be up 8%-15% in 2021, reflecting the start of recovery from Covid-19 and strength in utility markets and benefits from integration with 5G and electric vehicles. In 2021, we anticipate growth to be slightly muted by supply chain constraints, rising input costs, and the semiconductor shortage. Our fundamental outlook reflects data from the National Electrical Manufacturers Association’s Electroindustry Business Conditions Index. The June 2021 reading rose to 70 from 65.4 in May 2021, due to improved industry sentiment, but noting some impacts from the supply chain and inflation. Most respondents see better or unchanged conditions, and no respondents see declining conditions, which we think it indicative that recovery has taken hold in the sub-industry. Our opinion also reflects recent data from the Institute for Supply Management’s Purchasing Managers Index (PMI).

Why Focus on Undervalued Electrical Components & Equipment Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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5 Undervalued Electrical Components & Equipment Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Electrical Components & Equipment industry for Monday, January 02, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Electrical Components & Equipment industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

AZZ Inc’s Value Grade

Value Grade:

AZZ Inc. is a global provider of metal coating solutions, coil coating solutions, welding solutions, specialty electrical equipment, and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company’s segments include: The Metal Coatings segment, which provides hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating, and other metal coating applications to the steel fabrication and other industries through facilities located throughout the United States and Canada; The Precoat Metals segment, which provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction, appliance, container, transportation and other end markets in the United States; and The Infrastructure Solutions segment provides specialized products and services designed to support primarily industrial and electrical applications.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

AZZ Inc has a Value Score of 67, which is considered to be undervalued.

When you look at AZZ Inc’s price-to-sales ratio at 0.93 compared to the industry median at 1.17, this company has a lower price relative to revenue compared to its peers. This could make AZZ Inc’s stock more attractive for value investors.

AZZ Inc’s price-earnings ratio is 12.2 compared to the industry median at 18.2. This means it has a lower share price relative to earnings compared to its peers. This could make AZZ Inc more attractive for value investors.

Now, let’s assess AZZ Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 10.7, when compared to the industry median of 10.3, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. AZZ Inc’s shareholder yield is lower than its industry median ratio of 0.0%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. AZZ Inc’s price-to-book ratio is higher than its industry median ratio of 1.99. This could make AZZ Inc less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AZZ Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AZZ Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 23.7. This could make AZZ Inc more attractive because the lower P/FCF ratio indicates that AZZ Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Hudson Technologies, Inc.’s Value Grade

Value Grade:

Hudson Technologies, Inc. is a refrigerant services company, which provides solutions to recurring problems within the refrigeration industry. The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide Services performed at a customer's site. RefrigerantSide Services consists of system decontamination to remove moisture, oils and other contaminants intended to restore systems to designed capacity. In addition, its SmartEnergy OPS service is a Web-based real time continuous monitoring service applicable to a facility’s refrigeration systems and other energy systems. Its Chiller Chemistry and Chill Smart services are also predictive and diagnostic service offerings. The Company operates through its subsidiary, Hudson Technologies Company and Aspen Refrigerants.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Hudson Technologies, Inc. has a Value Score of 69, which is considered to be undervalued.

Hudson Technologies, Inc.’s price-earnings ratio is 4.5 compared to the industry median at 18.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Hudson Technologies, Inc. more attractive for value investors.

Hudson Technologies, Inc.’s price-to-book ratio is higher than its peers. This could make Hudson Technologies, Inc. less attractive for value investors when compared to the industry median at 1.99.

You can read more about Hudson Technologies, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Orbit International Corp.’s Value Grade

Value Grade:

Orbit International Corp. conducts its operations through its subsidiaries, Orbit Electronics Group (OEG) and Orbit Power Group (OPG). OEG is comprised of its Orbit Instrument and Tulip Development Laboratory (TDL) Divisions and its Q-Vio subsidiary. The OEG is engaged in the designing, manufacturing and selling of customized electronic components and subsystems. OEG’s principal products include remote control units, intercommunication panels, displays, keyboards and other. These products are used primarily in support of military programs. OPG is comprised of the Company’s subsidiary, Behlman Electronics Inc., and is engaged in the designing and manufacturing of VPX/VME power supplies, commercial power units, AC power supplies, frequency converters and commercial off-the-shelf power solutions. OPG’s principal products include power supplies, frequency converters, inverters and other. These products are primarily used in commercial applications and in support of military programs.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Orbit International Corp. has a Value Score of 84, which is considered to be undervalued.

Orbit International Corp.’s price-earnings ratio is 11.7 compared to the industry median at 18.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Orbit International Corp. more attractive for value investors.

Orbit International Corp.’s price-to-book ratio is lower than its peers. This could make Orbit International Corp. more attractive for value investors when compared to the industry median at 1.99.

You can read more about Orbit International Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Polar Power Inc’s Value Grade

Value Grade:

Polar Power, Inc. design, manufacture, and sell direct current (DC) power generators, renewable energy, and cooling systems for applications primarily in the telecommunications market. It is also engaged in other markets, including military, electric vehicle, marine, and industrial. It provides power generation equipment for the telecommunications markets. Within the various markets it service, its DC power systems provide DC power to service applications that do not have access to the utility grid (prime power and mobile applications) or have critical power needs and cannot be without power in the event of utility grid failure (back-up power applications). Serving these various markets, it offers the various configurations of its DC power systems, which include base power systems, hybrid power systems, DC solar hybrid power systems, and mobile power systems. Its DC power systems are available in diesel, natural gas, liquefied petroleum gas (LPG) / propane, and renewable fuel formats.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Polar Power Inc has a Value Score of 72, which is considered to be undervalued.

Polar Power Inc’s price-earnings ratio is 0.0 compared to the industry median at 18.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Polar Power Inc more attractive for value investors.

Polar Power Inc’s price-to-book ratio is higher than its peers. This could make Polar Power Inc less attractive for value investors when compared to the industry median at 1.99.

You can read more about Polar Power Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Encore Wire Corp’s Value Grade

Value Grade:

Encore Wire Corporation is a manufacturer of electrical building wire and cable. The Company is a supplier of building wire for interior electrical wiring in commercial and industrial buildings, homes, apartments, manufactured housing, and data centers. The Company offers an electrical building wire product line that consists primarily of NM-B cable, UF-B cable, THHN/THWN-2, XHHW-2, USE-2, RHH/RHW-2 and other types of wire products, including service entrance unarmored (SEU), service entrance cable (SER), Photovoltaic, underground residential distribution wire (URD), tray cable, metal-clad and armored cable. The Company serves various markets, such as healthcare, data center, airport expansion, military bases, oil and gas, transit, wastewater treatment, school construction, and power generation. The Company markets its products throughout the United States primarily through independent manufacturers, representatives, and through its own direct in-house marketing.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Encore Wire Corp has a Value Score of 94, which is considered to be undervalued.

Encore Wire Corp’s price-earnings ratio is 3.9 compared to the industry median at 18.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Encore Wire Corp more attractive for value investors.

Encore Wire Corp’s price-to-book ratio is lower than its peers. This could make Encore Wire Corp more attractive for value investors when compared to the industry median at 1.99.

You can read more about Encore Wire Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Electrical Components & Equipment Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Electrical Components & Equipment stocks as well as other industrys.

Choosing Which of the 5 Best Electrical Components & Equipment Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• AZZ Inc stock has a Value Grade of B.
• Hudson Technologies, Inc. stock has a Value Grade of B.
• Orbit International Corp. stock has a Value Grade of A.
• Polar Power Inc stock has a Value Grade of B.
• Encore Wire Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 undervalued stocks in the Electrical Components & Equipment industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Electrical Components & Equipment Stocks

Want to learn more about Electrical Components & Equipment stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 5 Undervalued Electrical Components & Equipment Stocks for Monday, January, 02
• Influx of New Blood for Model Shadow Stock Portfolio
• 3 Undervalued Electrical Components & Equipment Stocks for Friday, December, 30
• 3 Undervalued Electrical Components & Equipment Stocks for Thursday, December, 29

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