Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both Compagnie de Saint-Gobain - Unsponsored ADR (CODYY) and James Hardie (JHX). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Compagnie de Saint-Gobain - Unsponsored ADR has a Zacks Rank of #1 (Strong Buy), while James Hardie has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CODYY has an improving earnings outlook. 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.
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.
CODYY currently has a forward P/E ratio of 15.09, while JHX has a forward P/E of 15.23. We also note that CODYY has a PEG ratio of 3.53. 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. JHX currently has a PEG ratio of 4.88.
Another notable valuation metric for CODYY is its P/B ratio of 2.05. 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, JHX has a P/B of 4.95.
These metrics, and several others, help CODYY earn a Value grade of B, while JHX has been given a Value grade of D.
CODYY has seen stronger estimate revision activity and sports more attractive valuation metrics than JHX, so it seems like value investors will conclude that CODYY is the superior option right now.
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Compagnie de Saint-Gobain - Unsponsored ADR (CODYY) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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