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CECE vs. TTEK: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Pollution Control sector might want to consider either CECO Environmental or Tetra Tech (TTEK - 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 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.

Currently, CECO Environmental has a Zacks Rank of #2 (Buy), while Tetra Tech has a Zacks Rank of #3 (Hold). This means that CECE'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 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.

CECE currently has a forward P/E ratio of 18.07, while TTEK has a forward P/E of 20.45. We also note that CECE has a PEG ratio of 1.20. 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. TTEK currently has a PEG ratio of 1.36.

Another notable valuation metric for CECE is its P/B ratio of 1.49. 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, TTEK has a P/B of 3.53.

These are just a few of the metrics contributing to CECE's Value grade of A and TTEK's Value grade of C.

CECE stands above TTEK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CECE is the superior value option right now.


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