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CX vs. MLM: Which Stock Is the Better Value Option?
Investors interested in Building Products - Concrete and Aggregates stocks are likely familiar with Cemex (CX - Free Report) and Martin Marietta (MLM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Cemex and Martin Marietta are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
CX currently has a forward P/E ratio of 5.67, while MLM has a forward P/E of 24.08. We also note that CX has a PEG ratio of 0.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MLM currently has a PEG ratio of 1.58.
Another notable valuation metric for CX is its P/B ratio of 0.47. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MLM has a P/B of 2.94.
These are just a few of the metrics contributing to CX's Value grade of A and MLM's Value grade of C.
CX stands above MLM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CX is the superior value option right now.