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UFPI 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 Universal Forest Products (UFPI - Free Report) and Rayonier (RYN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Universal Forest Products has a Zacks Rank of #2 (Buy), while Rayonier has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UFPI is likely seeing its earnings outlook improve to a greater extent. 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.

UFPI currently has a forward P/E ratio of 11.23, while RYN has a forward P/E of 60.83. We also note that UFPI has a PEG ratio of 2.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RYN currently has a PEG ratio of 12.17.

Another notable valuation metric for UFPI is its P/B ratio of 1.74. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RYN has a P/B of 2.45.

These metrics, and several others, help UFPI earn a Value grade of A, while RYN has been given a Value grade of F.

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


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