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URI vs. CBPX: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both United Rentals (URI - Free Report) and Continental Building Products . 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 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.

Right now, both United Rentals and Continental Building Products are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 7.29, while CBPX has a forward P/E of 19.89. We also note that URI has a PEG ratio of 0.61. 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. CBPX currently has a PEG ratio of 3.98.

Another notable valuation metric for URI is its P/B ratio of 3.10. 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, CBPX has a P/B of 3.61.

These metrics, and several others, help URI earn a Value grade of A, while CBPX has been given a Value grade of C.

Both URI and CBPX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that URI is the superior value option right now.


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