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Investors with an interest in Building Products - Wood stocks have likely encountered both Boise Cascade (BCC) and Floor D?cor (FND). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Boise Cascade and Floor D?cor are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BCC likely has seen a stronger improvement to its earnings outlook than FND has recently. But this is only part of the picture for value investors.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BCC currently has a forward P/E ratio of 9.18, while FND has a forward P/E of 64.63. We also note that BCC has a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FND currently has a PEG ratio of 2.54.
Another notable valuation metric for BCC is its P/B ratio of 1.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FND has a P/B of 9.48.
These metrics, and several others, help BCC earn a Value grade of A, while FND has been given a Value grade of D.
BCC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BCC is likely the superior value option right now.
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Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
Floor Decor Holdings, Inc. (FND) : Free Stock Analysis Report
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