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VEOEY vs. WM: Which Stock Is the Better Value Option?

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Investors with an interest in Waste Removal Services stocks have likely encountered both Veolia Environnement SA (VEOEY - Free Report) and Waste Management (WM - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 12.78, while WM has a forward P/E of 25.40. We also note that VEOEY has a PEG ratio of 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WM currently has a PEG ratio of 2.60.

Another notable valuation metric for VEOEY is its P/B ratio of 1.78. 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, WM has a P/B of 8.31.

These are just a few of the metrics contributing to VEOEY's Value grade of A and WM's Value grade of C.

VEOEY has seen stronger estimate revision activity and sports more attractive valuation metrics than WM, so it seems like value investors will conclude that VEOEY is the superior option right now.

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