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PGTI or AWI: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either PGT or Armstrong World Industries (AWI - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

PGT and Armstrong World Industries are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PGTI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

PGTI currently has a forward P/E ratio of 14.98, while AWI has a forward P/E of 19.54. We also note that PGTI has a PEG ratio of 1.13. 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. AWI currently has a PEG ratio of 1.20.

Another notable valuation metric for PGTI is its P/B ratio of 2.29. 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, AWI has a P/B of 15.57.

These are just a few of the metrics contributing to PGTI's Value grade of B and AWI's Value grade of C.

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


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