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AFI vs. RYN: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Building Products - Wood sector might want to consider either Armstrong Flooring or Rayonier (RYN - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Armstrong Flooring has a Zacks Rank of #1 (Strong Buy), while Rayonier has a Zacks Rank of #3 (Hold) right now. This means that AFI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

AFI currently has a forward P/E ratio of 38.63, while RYN has a forward P/E of 49.77. We also note that AFI has a PEG ratio of 1.77. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RYN currently has a PEG ratio of 9.95.

Another notable valuation metric for AFI is its P/B ratio of 0.77. 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, RYN has a P/B of 2.58.

These are just a few of the metrics contributing to AFI's Value grade of B and RYN's Value grade of D.

AFI sticks out from RYN in both our Zacks Rank and Style Scores models, so value investors will likely feel that AFI is the better option right now.


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