HCCI vs. CWST: Which Stock Should Value Investors Buy Now?
Investors with an interest in Pollution Control stocks have likely encountered both 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Heritage-Crystal Clean has a Zacks Rank of #1 (Strong Buy), while Casella has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that HCCI likely has seen a stronger improvement to its earnings outlook than CWST has recently. But this is just one factor that value investors are interested in.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
HCCI currently has a forward P/E ratio of 19.08, while CWST has a forward P/E of 80.57. We also note that HCCI has a PEG ratio of 1.27. 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 11.28.
Another notable valuation metric for HCCI is its P/B ratio of 2.44. 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, CWST has a P/B of 8.80.
Based on these metrics and many more, HCCI holds a Value grade of B, while CWST has a Value grade of C.
HCCI 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 HCCI is likely 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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