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VEOEY or WM: 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 Veolia Environnement SA (VEOEY - Free Report) or Waste Management (WM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Veolia Environnement SA and Waste Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VEOEY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

VEOEY currently has a forward P/E ratio of 13.50, while WM has a forward P/E of 27.99. We also note that VEOEY has a PEG ratio of 1.25. 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 2.60.

Another notable valuation metric for VEOEY is its P/B ratio of 1.89. 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, WM has a P/B of 9.8.

These metrics, and several others, help VEOEY earn a Value grade of B, while WM has been given a Value grade of C.

VEOEY 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 VEOEY is likely the superior value option right now.


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