Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either PGT (PGTI) or Simpson Manufacturing (SSD). 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 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, PGT is sporting a Zacks Rank of #2 (Buy), while Simpson Manufacturing 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 PGTI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
PGTI currently has a forward P/E ratio of 16.92, while SSD has a forward P/E of 20.69. We also note that PGTI has a PEG ratio of 1.27. 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. SSD currently has a PEG ratio of 4.14.
Another notable valuation metric for PGTI is its P/B ratio of 2.59. 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, SSD has a P/B of 3.50.
These are just a few of the metrics contributing to PGTI's Value grade of B and SSD's Value grade of D.
PGTI has seen stronger estimate revision activity and sports more attractive valuation metrics than SSD, so it seems like value investors will conclude that PGTI is the superior option right now.
PGT, Inc. (PGTI): Free Stock Analysis Report
Simpson Manufacturing Company, Inc. (SSD): Free Stock Analysis Report
Original post