Investors looking for stocks in the Furniture sector might want to consider either American Woodmark (AMWD) or WillScot (WSC). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, American Woodmark is sporting a Zacks Rank of #2 (Buy), while WillScot has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMWD likely has seen a stronger improvement to its earnings outlook than WSC has recently. 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.
AMWD currently has a forward P/E ratio of 14.01, while WSC has a forward P/E of 66.30. We also note that AMWD has a PEG ratio of 1.56. 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. WSC currently has a PEG ratio of 4.42.
Another notable valuation metric for AMWD is its P/B ratio of 2.63. 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, WSC has a P/B of 3.06.
These metrics, and several others, help AMWD earn a Value grade of B, while WSC has been given a Value grade of D.
AMWD has seen stronger estimate revision activity and sports more attractive valuation metrics than WSC, so it seems like value investors will conclude that AMWD is the superior option right now.
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American Woodmark Corporation (AMWD) : Free Stock Analysis Report
WillScot Corporation (WSC) : Free Stock Analysis Report
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