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BCC vs. PCH: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Building Products - Wood sector have probably already heard of Boise Cascade (BCC - Free Report) and Potlatch (PCH - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Boise Cascade has a Zacks Rank of #2 (Buy), while Potlatch has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BCC is likely seeing its earnings outlook improve to a greater extent. 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.

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.

BCC currently has a forward P/E ratio of 15.28, while PCH has a forward P/E of 44.24. We also note that BCC has a PEG ratio of 2.37. 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. PCH currently has a PEG ratio of 8.85.

Another notable valuation metric for BCC is its P/B ratio of 1.59. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, PCH has a P/B of 2.08.

Based on these metrics and many more, BCC holds a Value grade of B, while PCH has a Value grade of D.

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


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