Investors with an interest in Building Products - Wood stocks have likely encountered both Boise Cascade (BCC) and Weyerhaeuser (WY). 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.
Currently, Boise Cascade has a Zacks Rank of #1 (Strong Buy), while Weyerhaeuser has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BCC has an improving earnings outlook. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BCC currently has a forward P/E ratio of 16.63, while WY has a forward P/E of 48.37. We also note that BCC has a PEG ratio of 2.10. 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. WY currently has a PEG ratio of 9.67.
Another notable valuation metric for BCC is its P/B ratio of 1.75. 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, WY has a P/B of 2.34.
These are just a few of the metrics contributing to BCC's Value grade of A and WY's Value grade of D.
BCC sticks out from WY in both our Zacks Rank and Style Scores models, so value investors will likely feel that BCC is the better option right now.
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Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
Weyerhaeuser Company (WY) : Free Stock Analysis Report
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