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BECN or HD: Which Is the Better Value Stock Right Now?
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Investors with an interest in Building Products - Retail stocks have likely encountered both Beacon Roofing Supply (BECN - Free Report) and Home Depot (HD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Beacon Roofing Supply and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BECN likely has seen a stronger improvement to its earnings outlook than HD has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BECN currently has a forward P/E ratio of 11.20, while HD has a forward P/E of 20.55. We also note that BECN has a PEG ratio of 1.49. 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. HD currently has a PEG ratio of 2.31.
Another notable valuation metric for BECN is its P/B ratio of 2.98. 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, HD has a P/B of 215.20.
Based on these metrics and many more, BECN holds a Value grade of A, while HD has a Value grade of C.
BECN stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BECN is the superior value option right now.
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BECN or HD: Which Is the Better Value Stock Right Now?
Investors with an interest in Building Products - Retail stocks have likely encountered both Beacon Roofing Supply (BECN - Free Report) and Home Depot (HD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Beacon Roofing Supply and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BECN likely has seen a stronger improvement to its earnings outlook than HD has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BECN currently has a forward P/E ratio of 11.20, while HD has a forward P/E of 20.55. We also note that BECN has a PEG ratio of 1.49. 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. HD currently has a PEG ratio of 2.31.
Another notable valuation metric for BECN is its P/B ratio of 2.98. 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, HD has a P/B of 215.20.
Based on these metrics and many more, BECN holds a Value grade of A, while HD has a Value grade of C.
BECN stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BECN is the superior value option right now.