Back to top

Image: Bigstock

QRHC vs. SRCL: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Waste Removal Services stocks are likely familiar with Quest Resource (QRHC - Free Report) and Stericycle (SRCL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Quest Resource has a Zacks Rank of #1 (Strong Buy), while Stericycle has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that QRHC has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

QRHC currently has a forward P/E ratio of 14.98, while SRCL has a forward P/E of 21.51. We also note that QRHC has a PEG ratio of 1. 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. SRCL currently has a PEG ratio of 2.69.

Another notable valuation metric for QRHC is its P/B ratio of 1.05. 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, SRCL has a P/B of 1.70.

These metrics, and several others, help QRHC earn a Value grade of B, while SRCL has been given a Value grade of C.

QRHC 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 QRHC is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Stericycle, Inc. (SRCL) - free report >>

Quest Resource Holding Corporation. (QRHC) - free report >>

Published in