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

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Investors with an interest in Pollution Control stocks have likely encountered both Heritage-Crystal Clean (HCCI) and Casella (CWST). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

Heritage-Crystal Clean has a Zacks Rank of #2 (Buy), while Casella has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HCCI 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.

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.

HCCI currently has a forward P/E ratio of 13.20, while CWST has a forward P/E of 98.92. We also note that HCCI has a PEG ratio of 0.88. 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 9.99.

Another notable valuation metric for HCCI is its P/B ratio of 2.39. 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 10.39.

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

HCCI has seen stronger estimate revision activity and sports more attractive valuation metrics than CWST, so it seems like value investors will conclude that HCCI is the superior 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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Zacks Investment Research