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

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Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Patrick Industries (PATK - Free Report) and Construction Partners (ROAD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Patrick Industries is sporting a Zacks Rank of #1 (Strong Buy), while Construction Partners has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PATK is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PATK currently has a forward P/E ratio of 15.44, while ROAD has a forward P/E of 30.53. We also note that PATK has a PEG ratio of 1.63. 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 5.79.

Another notable valuation metric for PATK is its P/B ratio of 2.70. 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, ROAD has a P/B of 3.61.

Based on these metrics and many more, PATK holds a Value grade of A, while ROAD has a Value grade of D.

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


In-Depth Zacks Research for the Tickers Above


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Patrick Industries, Inc. (PATK) - free report >>

Construction Partners, Inc. (ROAD) - free report >>

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