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

Zacks Equity Research
In the latest trading session, Innovative Industrial Properties, Inc. (IIPR) closed at $128.34, marking a +0.72% move from the previous day.

Investors interested in stocks from the Pollution Control sector have probably already heard of CECO Environmental (CECE) and Tetra Tech (TTEK). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both CECO Environmental and Tetra Tech have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

CECE currently has a forward P/E ratio of 16.26, while TTEK has a forward P/E of 19.64. We also note that CECE has a PEG ratio of 1.08. 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. TTEK currently has a PEG ratio of 1.40.

Another notable valuation metric for CECE is its P/B ratio of 1.46. 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, TTEK has a P/B of 3.39.

These metrics, and several others, help CECE earn a Value grade of A, while TTEK has been given a Value grade of C.

Both CECE and TTEK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CECE is the superior value option right now.


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CECO Environmental Corp. (CECE) : Free Stock Analysis Report
 
Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
 
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