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TMX or HDSN: Which Is the Better Value Stock Right Now?

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Investors with an interest in Industrial Services stocks have likely encountered both Terminix Global Holdings, Inc. and Hudson Technologies (HDSN - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Terminix Global Holdings, Inc. is sporting a Zacks Rank of #2 (Buy), while Hudson Technologies has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TMX has an improving earnings outlook. 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.

TMX currently has a forward P/E ratio of 27.72, while HDSN has a forward P/E of 111.67. We also note that TMX has a PEG ratio of 1.52. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HDSN currently has a PEG ratio of 3.72.

Another notable valuation metric for TMX is its P/B ratio of 2.06. 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, HDSN has a P/B of 2.84.

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

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


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