HDELY vs. ROAD: Which Stock Should Value Investors Buy Now?
Investors interested in Building Products - Miscellaneous stocks are likely familiar with Heidelberg Materials AG Unsponsored ADR (HDELY) and Construction Partners (ROAD). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Heidelberg Materials AG Unsponsored ADR and Construction Partners are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 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 8.57, while ROAD has a forward P/E of 39.61. We also note that HDELY has a PEG ratio of 0.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ROAD currently has a PEG ratio of 1.28.
Another notable valuation metric for HDELY is its P/B ratio of 1.01. 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, ROAD has a P/B of 6.75.
These are just a few of the metrics contributing to HDELY's Value grade of A and ROAD's Value grade of C.
Both HDELY and ROAD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HDELY is the superior value option right now.
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Heidelberg Materials AG Unsponsored ADR (HDELY) : Free Stock Analysis Report
Construction Partners, Inc. (ROAD) : Free Stock Analysis Report