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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 stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on 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. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HDELY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
HDELY currently has a forward P/E ratio of 9.04, while ROAD has a forward P/E of 43.35. We also note that HDELY has a PEG ratio of 0.80. 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. ROAD currently has a PEG ratio of 1.44.
Another notable valuation metric for HDELY is its P/B ratio of 1.05. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ROAD has a P/B of 6.13.
These are just a few of the metrics contributing to HDELY's Value grade of A and ROAD's 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