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OC vs. IBP: Which Stock Is the Better Value Option?
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Investors interested in Building Products - Miscellaneous stocks are likely familiar with Owens Corning (OC - Free Report) and Installed Building Products (IBP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Owens Corning and Installed Building Products have a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
OC currently has a forward P/E ratio of 15.63, while IBP has a forward P/E of 23.07. We also note that OC has a PEG ratio of 2.33. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IBP currently has a PEG ratio of 4.25.
Another notable valuation metric for OC is its P/B ratio of 3.27. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IBP has a P/B of 9.98.
Based on these metrics and many more, OC holds a Value grade of A, while IBP has a Value grade of C.
Both OC and IBP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OC is the superior value option right now.
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OC vs. IBP: Which Stock Is the Better Value Option?
Investors interested in Building Products - Miscellaneous stocks are likely familiar with Owens Corning (OC - Free Report) and Installed Building Products (IBP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Owens Corning and Installed Building Products have a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
OC currently has a forward P/E ratio of 15.63, while IBP has a forward P/E of 23.07. We also note that OC has a PEG ratio of 2.33. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IBP currently has a PEG ratio of 4.25.
Another notable valuation metric for OC is its P/B ratio of 3.27. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IBP has a P/B of 9.98.
Based on these metrics and many more, OC holds a Value grade of A, while IBP has a Value grade of C.
Both OC and IBP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OC is the superior value option right now.