Investors interested in Building Products - Miscellaneous stocks are likely familiar with Owens Corning (OC - Free Report) and GCP Applied Technologies (GCP - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Owens Corning has a Zacks Rank of #2 (Buy), while GCP Applied Technologies has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that OC likely has seen a stronger improvement to its earnings outlook than GCP has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
OC currently has a forward P/E ratio of 11.43, while GCP has a forward P/E of 27.51. We also note that OC has a PEG ratio of 0.65. 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. GCP currently has a PEG ratio of 1.53.
Another notable valuation metric for OC is its P/B ratio of 1.69. 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, GCP has a P/B of 4.13.
These metrics, and several others, help OC earn a Value grade of B, while GCP has been given a Value grade of D.
OC sticks out from GCP in both our Zacks Rank and Style Scores models, so value investors will likely feel that OC is the better option right now.