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CECO vs. DCI: Which Stock Is the Better Value Option?

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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 is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, CECO Environmental has a Zacks Rank of #2 (Buy), while Donaldson has a Zacks Rank of #3 (Hold). 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 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.

CECO currently has a forward P/E ratio of 16.47, while DCI has a forward P/E of 19.72. We also note that CECO has a PEG ratio of 1.10. 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. DCI currently has a PEG ratio of 1.88.

Another notable valuation metric for CECO is its P/B ratio of 2.01. 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, DCI has a P/B of 6.41.

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

CECO 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 CECO is likely the superior value option right now.


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

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