CECO or CWST: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Pollution Control sector might want to consider either CECO Environmental (CECO) or Casella (CWST). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
CECO Environmental has a Zacks Rank of #2 (Buy), while Casella has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CECO likely has seen a stronger improvement to its earnings outlook than CWST has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
CECO currently has a forward P/E ratio of 15.46, while CWST has a forward P/E of 58.98. We also note that CECO has a PEG ratio of 1.03. 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. CWST currently has a PEG ratio of 3.18.
Another notable valuation metric for CECO is its P/B ratio of 2.44. 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, CWST has a P/B of 8.19.
Based on these metrics and many more, CECO holds a Value grade of B, while CWST has a Value grade of D.
CECO 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 CECO is likely the superior value option right now.
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CECO Environmental Corp. (CECO) : Free Stock Analysis Report
Casella Waste Systems, Inc. (CWST) : Free Stock Analysis Report
