ROAD vs. SSD: Which Stock Is the Better Value Option?
Investors interested in Building Products - Miscellaneous stocks are likely familiar with Construction Partners, Inc. (ROAD) and Simpson Manufacturing (SSD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Construction Partners, Inc. has a Zacks Rank of #2 (Buy), while Simpson Manufacturing has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ROAD likely has seen a stronger improvement to its earnings outlook than SSD has recently. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ROAD currently has a forward P/E ratio of 11.03, while SSD has a forward P/E of 25.07. We also note that ROAD has a PEG ratio of 1.10. 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. SSD currently has a PEG ratio of 5.01.
Another notable valuation metric for ROAD is its P/B ratio of 2.92. 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, SSD has a P/B of 3.74.
These metrics, and several others, help ROAD earn a Value grade of A, while SSD has been given a Value grade of D.
ROAD stands above SSD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ROAD is the superior value option right now.
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Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
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