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PNR vs. WM: Which Stock Is the Better Value Option?
Investors interested in Waste Removal Services stocks are likely familiar with Pentair plc (PNR - Free Report) and Waste Management (WM - 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.
Right now, Pentair plc is sporting a Zacks Rank of #2 (Buy), while Waste Management has a Zacks Rank of #3 (Hold). This means that PNR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 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.
PNR currently has a forward P/E ratio of 24.34, while WM has a forward P/E of 30.78. We also note that PNR has a PEG ratio of 1.86. 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. WM currently has a PEG ratio of 2.37.
Another notable valuation metric for PNR is its P/B ratio of 4.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WM has a P/B of 11.32.
These metrics, and several others, help PNR earn a Value grade of B, while WM has been given a Value grade of C.
PNR has seen stronger estimate revision activity and sports more attractive valuation metrics than WM, so it seems like value investors will conclude that PNR is the superior option right now.