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HTO or CWST: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Waste Removal Services sector might want to consider either H20 (HTO - Free Report) or Casella (CWST - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

H20 has a Zacks Rank of #2 (Buy), while Casella has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HTO likely has seen a stronger improvement to its earnings outlook than CWST has recently. 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.

HTO currently has a forward P/E ratio of 17.54, while CWST has a forward P/E of 110.26. We also note that HTO has a PEG ratio of 4.05. 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. CWST currently has a PEG ratio of 4.28.

Another notable valuation metric for HTO is its P/B ratio of 1.28. 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, CWST has a P/B of 4.80.

These metrics, and several others, help HTO earn a Value grade of B, while CWST has been given a Value grade of D.

HTO stands above CWST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HTO is the superior value option right now.


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