Investors with an interest in Building Products - Wood stocks have likely encountered both Boise Cascade (BCC - Free Report) and Floor Decor Holdings, Inc. (FND - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Boise Cascade and Floor Decor Holdings, Inc. are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
BCC currently has a forward P/E ratio of 12.65, while FND has a forward P/E of 60.64. We also note that BCC has a PEG ratio of 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FND currently has a PEG ratio of 2.64.
Another notable valuation metric for BCC is its P/B ratio of 2.24. 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, FND has a P/B of 8.77.
These are just a few of the metrics contributing to BCC's Value grade of A and FND's Value grade of F.
Both BCC and FND are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCC is the superior value option right now.