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HCCI vs. CWST: Which Stock Is the Better Value Option?

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·2 min read
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  • HCCI
  • CWST

Investors interested in Pollution Control stocks are likely familiar with Heritage-Crystal Clean (HCCI) and Casella (CWST). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Heritage-Crystal Clean has a Zacks Rank of #1 (Strong Buy), while Casella has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HCCI is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

HCCI currently has a forward P/E ratio of 13.53, while CWST has a forward P/E of 103.99. We also note that HCCI has a PEG ratio of 0.90. 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. CWST currently has a PEG ratio of 10.50.

Another notable valuation metric for HCCI is its P/B ratio of 2.52. 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, CWST has a P/B of 11.03.

These are just a few of the metrics contributing to HCCI's Value grade of B and CWST's Value grade of D.

HCCI stands above CWST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HCCI is the superior value option right now.


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HeritageCrystal Clean, Inc. (HCCI) : Free Stock Analysis Report
 
Casella Waste Systems, Inc. (CWST) : Free Stock Analysis Report
 
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