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HCCI vs. CWST: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Pollution Control sector have probably already heard of Heritage-Crystal Clean and Casella (CWST - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Heritage-Crystal Clean has a Zacks Rank of #1 (Strong Buy), while Casella has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HCCI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

HCCI currently has a forward P/E ratio of 14.46, while CWST has a forward P/E of 88.76. We also note that HCCI has a PEG ratio of 0.96. 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. CWST currently has a PEG ratio of 6.26.

Another notable valuation metric for HCCI is its P/B ratio of 2.03. 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, CWST has a P/B of 10.80.

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

HCCI stands above CWST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HCCI is the superior value option right now.


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