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GMS vs. HD: Which Stock Is the Better Value Option?
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Investors with an interest in Building Products - Retail stocks have likely encountered both GMS Inc. (GMS - Free Report) and Home Depot (HD - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
GMS Inc. and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GMS has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
GMS currently has a forward P/E ratio of 5.16, while HD has a forward P/E of 17.78. We also note that GMS has a PEG ratio of 0.74. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HD currently has a PEG ratio of 1.36.
Another notable valuation metric for GMS is its P/B ratio of 1.13. 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, HD has a P/B of 150.46.
Based on these metrics and many more, GMS holds a Value grade of B, while HD has a Value grade of C.
GMS stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GMS is the superior value option right now.
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GMS vs. HD: Which Stock Is the Better Value Option?
Investors with an interest in Building Products - Retail stocks have likely encountered both GMS Inc. (GMS - Free Report) and Home Depot (HD - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
GMS Inc. and Home Depot are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GMS has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
GMS currently has a forward P/E ratio of 5.16, while HD has a forward P/E of 17.78. We also note that GMS has a PEG ratio of 0.74. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HD currently has a PEG ratio of 1.36.
Another notable valuation metric for GMS is its P/B ratio of 1.13. 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, HD has a P/B of 150.46.
Based on these metrics and many more, GMS holds a Value grade of B, while HD has a Value grade of C.
GMS stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GMS is the superior value option right now.