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HCCI or CWST: Which Is the Better Value Stock Right Now?

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Investors interested in Pollution Control stocks are likely familiar with Heritage-Crystal Clean and Casella (CWST - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Heritage-Crystal Clean and Casella are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that HCCI likely has seen a stronger improvement to its earnings outlook than CWST has recently. 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.

HCCI currently has a forward P/E ratio of 14.70, while CWST has a forward P/E of 86.12. We also note that HCCI has a PEG ratio of 0.98. 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. CWST currently has a PEG ratio of 6.08.

Another notable valuation metric for HCCI is its P/B ratio of 2.06. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CWST has a P/B of 10.48.

These are just a few of the metrics contributing to HCCI's Value grade of B and CWST's Value grade of D.

HCCI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HCCI is likely the superior value option right now.


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