Investors interested in Building Products - Miscellaneous stocks are likely familiar with Patrick Industries (PATK) and Armstrong World Industries (AWI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Both Patrick Industries and Armstrong World Industries have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
PATK currently has a forward P/E ratio of 12.50, while AWI has a forward P/E of 17.91. We also note that PATK has a PEG ratio of 0.98. 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. AWI currently has a PEG ratio of 1.03.
Another notable valuation metric for PATK is its P/B ratio of 3.44. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AWI has a P/B of 8.53.
These are just a few of the metrics contributing to PATK's Value grade of B and AWI's Value grade of C.
Both PATK and AWI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PATK is the superior value option right now.
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Patrick Industries, Inc. (PATK) : Free Stock Analysis Report
Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report
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