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QRHC vs. WCN: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Waste Removal Services sector have probably already heard of Quest Resource (QRHC) and Waste Connections (WCN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Right now, both Quest Resource and Waste Connections are sporting a Zacks Rank of # 2 (Buy). 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 just one piece of the puzzle for value investors.

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 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.

QRHC currently has a forward P/E ratio of 39.06, while WCN has a forward P/E of 39.93. We also note that QRHC has a PEG ratio of 2.60. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WCN currently has a PEG ratio of 2.99.

Another notable valuation metric for QRHC is its P/B ratio of 1.65. 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, WCN has a P/B of 4.77.

These metrics, and several others, help QRHC earn a Value grade of B, while WCN has been given a Value grade of D.

Both QRHC and WCN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that QRHC is the superior value option right now.


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Quest Resource Holding Corporation. (QRHC): Free Stock Analysis Report
 
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
 
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