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CECO vs. DCI: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Pollution Control sector might want to consider either CECO Environmental (CECO - Free Report) or Donaldson (DCI - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

CECO Environmental has a Zacks Rank of #2 (Buy), while Donaldson 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 CECO is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

CECO currently has a forward P/E ratio of 16.54, while DCI has a forward P/E of 19.83. We also note that CECO has a PEG ratio of 1.10. 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. DCI currently has a PEG ratio of 1.89.

Another notable valuation metric for CECO is its P/B ratio of 2.01. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DCI has a P/B of 6.45.

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

CECO has seen stronger estimate revision activity and sports more attractive valuation metrics than DCI, so it seems like value investors will conclude that CECO is the superior option right now.


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CECO Environmental Corp. (CECO) - free report >>

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