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Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either Heidelberg Materials AG Unsponsored ADR (HDELY) or Construction Partners (ROAD). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Heidelberg Materials AG Unsponsored ADR has a Zacks Rank of #2 (Buy), while Construction Partners has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HDELY likely has seen a stronger improvement to its earnings outlook than ROAD has recently. But this is just one piece of the puzzle for value investors.
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 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.
HDELY currently has a forward P/E ratio of 8.49, while ROAD has a forward P/E of 43.66. We also note that HDELY has a PEG ratio of 0.75. 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. ROAD currently has a PEG ratio of 1.41.
Another notable valuation metric for HDELY is its P/B ratio of 1. 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, ROAD has a P/B of 7.39.
These metrics, and several others, help HDELY earn a Value grade of A, while ROAD has been given a Value grade of C.
HDELY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HDELY is likely the superior value option right now.
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Heidelberg Materials AG Unsponsored ADR (HDELY) : Free Stock Analysis Report