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HTO vs. GFL: Which Stock Is the Better Value Option?

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Investors interested in Waste Removal Services stocks are likely familiar with H20 (HTO - Free Report) and GFL Environmental Inc. (GFL - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, H20 is sporting a Zacks Rank of #2 (Buy), while GFL Environmental Inc. 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 HTO is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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 19.78, while GFL has a forward P/E of 69.62. We also note that HTO has a PEG ratio of 3.02. 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. GFL currently has a PEG ratio of 3.39.

Another notable valuation metric for HTO is its P/B ratio of 1.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GFL has a P/B of 2.91.

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

HTO stands above GFL 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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