Investors interested in stocks from the Industrial Services sector have probably already heard of HD Supply (HDS) and BOUYGUES SA (BOUYF). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
HD Supply and BOUYGUES SA are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. Investors should feel comfortable knowing that HDS likely has seen a stronger improvement to its earnings outlook than BOUYF has recently. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HDS currently has a forward P/E ratio of 11.59, while BOUYF has a forward P/E of 14.18. We also note that HDS has a PEG ratio of 0.84. 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. BOUYF currently has a PEG ratio of 3.08.
Another notable valuation metric for HDS is its P/B ratio of 4.38. 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, BOUYF has a P/B of 5.36.
These are just a few of the metrics contributing to HDS's Value grade of A and BOUYF's Value grade of D.
HDS has seen stronger estimate revision activity and sports more attractive valuation metrics than BOUYF, so it seems like value investors will conclude that HDS is the superior option right now.
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HD Supply Holdings, Inc. (HDS) : Free Stock Analysis Report
BOUYGUES SA (BOUYF) : Free Stock Analysis Report
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