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CECE vs. SMED: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in Pollution Control stocks are likely familiar with CECO Environmental (CECE) and Sharps Compliance (SMED). 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Right now, CECO Environmental is sporting a Zacks Rank of #2 (Buy), while Sharps Compliance has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CECE is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

CECE currently has a forward P/E ratio of 14.69, while SMED has a forward P/E of 53.96. We also note that CECE has a PEG ratio of 0.98. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SMED currently has a PEG ratio of 2.35.

Another notable valuation metric for CECE is its P/B ratio of 1.28. 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, SMED has a P/B of 4.08.

These are just a few of the metrics contributing to CECE's Value grade of B and SMED's Value grade of C.

CECE sticks out from SMED in both our Zacks Rank and Style Scores models, so value investors will likely feel that CECE is the better option right now.


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CECO Environmental Corp. (CECE) : Free Stock Analysis Report
 
Sharps Compliance Corp (SMED) : Free Stock Analysis Report
 
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Zacks Investment Research