Back to top

URI or GCP: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of United Rentals (URI - Free Report) and GCP Applied Technologies (GCP - 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

United Rentals and GCP Applied Technologies are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that URI likely has seen a stronger improvement to its earnings outlook than GCP has recently. But this is just one factor that value investors are interested in.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

URI currently has a forward P/E ratio of 9.45, while GCP has a forward P/E of 26.08. We also note that URI has a PEG ratio of 0.53. 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 1.45.

Another notable valuation metric for URI is its P/B ratio of 3.94. 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 4.30.

These are just a few of the metrics contributing to URI's Value grade of A and GCP's Value grade of D.

URI sticks out from GCP in both our Zacks Rank and Style Scores models, so value investors will likely feel that URI is the better option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


United Rentals, Inc. (URI) - free report >>

GCP Applied Technologies Inc. (GCP) - free report >>

More from Zacks Tale of the Tape

You May Like