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HDSN vs. GWW: Which Stock Is the Better Value Option?

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Investors interested in Industrial Services stocks are likely familiar with Hudson Technologies (HDSN - Free Report) and W.W. Grainger (GWW - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Hudson Technologies and W.W. Grainger are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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.

HDSN currently has a forward P/E ratio of 5.07, while GWW has a forward P/E of 20.85. We also note that HDSN has a PEG ratio of 0.17. 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. GWW currently has a PEG ratio of 1.60.

Another notable valuation metric for HDSN is its P/B ratio of 3.49. 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, GWW has a P/B of 12.

These are just a few of the metrics contributing to HDSN's Value grade of B and GWW's Value grade of C.

Both HDSN and GWW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HDSN is the superior value option right now.


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W.W. Grainger, Inc. (GWW) - free report >>

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