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PATK vs. SSD: Which Stock Is the Better Value Option?

Zacks Equity Research
RLI Corp. (RLI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors interested in Building Products - Miscellaneous stocks are likely familiar with Patrick Industries (PATK) and Simpson Manufacturing (SSD). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Patrick Industries and Simpson Manufacturing are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PATK is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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 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.

PATK currently has a forward P/E ratio of 11.33, while SSD has a forward P/E of 22.66. We also note that PATK has a PEG ratio of 0.76. 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. SSD currently has a PEG ratio of 4.53.

Another notable valuation metric for PATK is its P/B ratio of 3.27. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SSD has a P/B of 3.55.

These are just a few of the metrics contributing to PATK's Value grade of A and SSD's Value grade of D.

PATK 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 PATK is likely the superior value option right now.


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Patrick Industries, Inc. (PATK) : Free Stock Analysis Report
 
Simpson Manufacturing Company, Inc. (SSD) : Free Stock Analysis Report
 
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