HDELY vs. ROAD: Which Stock Is the Better Value Option?

HDELY ROAD

Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either Heidelberg Materials AG Unsponsored ADR (HDELY - Free Report) or Construction Partners (ROAD - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, both Heidelberg Materials AG Unsponsored ADR and Construction Partners are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

HDELY currently has a forward P/E ratio of 7.88, while ROAD has a forward P/E of 41.86. We also note that HDELY has a PEG ratio of 0.81. 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. ROAD currently has a PEG ratio of 1.14.

Another notable valuation metric for HDELY is its P/B ratio of 0.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ROAD has a P/B of 3.39.

These metrics, and several others, help HDELY earn a Value grade of A, while ROAD has been given a Value grade of C.

Both HDELY and ROAD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HDELY is the superior value option right now.

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