Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both United Rentals (URI - Free Report) and Patrick Industries (PATK - 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
United Rentals and Patrick Industries are both sporting a Zacks Rank of # 1 (Strong Buy) right now. 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. However, value investors will care about much more than just this.
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 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.
URI currently has a forward P/E ratio of 12.12, while PATK has a forward P/E of 23.83. We also note that URI has a PEG ratio of 1.01. 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. PATK currently has a PEG ratio of 11.24.
Another notable valuation metric for URI is its P/B ratio of 2.89. 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, PATK has a P/B of 3.14.
Based on these metrics and many more, URI holds a Value grade of A, while PATK has a Value grade of C.
Both URI and PATK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that URI is the superior value option right now.