IBP or JHX: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Installed Building Products (IBP) and James Hardie (JHX). 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.
Installed Building Products and James Hardie are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
IBP currently has a forward P/E ratio of 16.88, while JHX has a forward P/E of 22.39. We also note that IBP has a PEG ratio of 1.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. JHX currently has a PEG ratio of 1.89.
Another notable valuation metric for IBP is its P/B ratio of 8.27. 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, JHX has a P/B of 8.77.
Based on these metrics and many more, IBP holds a Value grade of B, while JHX has a Value grade of C.
Both IBP and JHX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IBP is the superior value option right now.
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Installed Building Products, Inc. (IBP) : Free Stock Analysis Report
James Hardie Industries PLC. (JHX) : Free Stock Analysis Report
