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BECN or HD: Which Is the Better Value Stock Right Now?
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Investors with an interest in Building Products - Retail stocks have likely encountered both Beacon Roofing Supply (BECN - Free Report) and Home Depot (HD - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Beacon Roofing Supply and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BECN'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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BECN currently has a forward P/E ratio of 10.76, while HD has a forward P/E of 21.70. We also note that BECN has a PEG ratio of 1.43. 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. HD currently has a PEG ratio of 2.44.
Another notable valuation metric for BECN is its P/B ratio of 2.90. 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, HD has a P/B of 227.22.
These metrics, and several others, help BECN earn a Value grade of A, while HD has been given a Value grade of C.
BECN 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 BECN is likely the superior value option right now.
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BECN or HD: Which Is the Better Value Stock Right Now?
Investors with an interest in Building Products - Retail stocks have likely encountered both Beacon Roofing Supply (BECN - Free Report) and Home Depot (HD - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Beacon Roofing Supply and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BECN'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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BECN currently has a forward P/E ratio of 10.76, while HD has a forward P/E of 21.70. We also note that BECN has a PEG ratio of 1.43. 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. HD currently has a PEG ratio of 2.44.
Another notable valuation metric for BECN is its P/B ratio of 2.90. 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, HD has a P/B of 227.22.
These metrics, and several others, help BECN earn a Value grade of A, while HD has been given a Value grade of C.
BECN 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 BECN is likely the superior value option right now.