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URI or ROAD: Which Is the Better Value Stock Right Now?

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Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both United Rentals (URI - Free Report) and Construction Partners (ROAD - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

United Rentals and Construction Partners are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. Investors should feel comfortable knowing that URI likely has seen a stronger improvement to its earnings outlook than ROAD has recently. But this is just one piece of the puzzle for value investors.

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.

URI currently has a forward P/E ratio of 8.61, while ROAD has a forward P/E of 66.07. We also note that URI has a PEG ratio of 0.49. 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 1.79.

Another notable valuation metric for URI is its P/B ratio of 3.16. 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 3.35.

Based on these metrics and many more, URI holds a Value grade of B, while ROAD has a Value grade of C.

URI 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 URI is likely the superior value option right now.


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