HCCI vs. CWST: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Pollution Control sector might want to consider either Heritage-Crystal Clean (HCCI) 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.
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. 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. 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.
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 15.87, while CWST has a forward P/E of 77.11. We also note that HCCI has a PEG ratio of 1.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CWST currently has a PEG ratio of 5.44.
Another notable valuation metric for HCCI is its P/B ratio of 2.05. 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 10.02.
Based on these metrics and many more, HCCI holds a Value grade of A, while CWST has a Value grade of D.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HeritageCrystal Clean, Inc. (HCCI) : Free Stock Analysis Report
Casella Waste Systems, Inc. (CWST) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
