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BLD vs. GCP: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both TopBuild (BLD - Free Report) and GCP Applied Technologies . 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

TopBuild and GCP Applied Technologies are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BLD has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

BLD currently has a forward P/E ratio of 15.73, while GCP has a forward P/E of 25.64. We also note that BLD has a PEG ratio of 0.63. 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. GCP currently has a PEG ratio of 1.42.

Another notable valuation metric for BLD is its P/B ratio of 2.35. 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, GCP has a P/B of 4.21.

These metrics, and several others, help BLD earn a Value grade of B, while GCP has been given a Value grade of C.

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


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