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AFI or RYN: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Building Products - Wood sector have probably already heard of Armstrong Flooring and Rayonier (RYN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Armstrong Flooring is sporting a Zacks Rank of #1 (Strong Buy), while Rayonier 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 AFI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

AFI currently has a forward P/E ratio of 41.67, while RYN has a forward P/E of 50.64. We also note that AFI has a PEG ratio of 1.91. 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. RYN currently has a PEG ratio of 10.13.

Another notable valuation metric for AFI is its P/B ratio of 0.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RYN has a P/B of 2.63.

These are just a few of the metrics contributing to AFI's Value grade of B and RYN's Value grade of D.

AFI stands above RYN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AFI is the superior value option right now.


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