SBS vs. GWRS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Utility - Water Supply sector have probably already heard of Sabesp (SBS) and Global Water Resources, Inc. (GWRS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Sabesp has a Zacks Rank of #2 (Buy), while Global Water Resources, Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SBS has an improving earnings outlook. 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.
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.
SBS currently has a forward P/E ratio of 13.32, while GWRS has a forward P/E of 41.17. We also note that SBS has a PEG ratio of 0.95. 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. GWRS currently has a PEG ratio of 2.74.
Another notable valuation metric for SBS is its P/B ratio of 1.82. 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, GWRS has a P/B of 6.08.
These metrics, and several others, help SBS earn a Value grade of B, while GWRS has been given a Value grade of D.
SBS sticks out from GWRS in both our Zacks Rank and Style Scores models, so value investors will likely feel that SBS is the better option right now.
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Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp (SBS) : Free Stock Analysis Report
Global Water Resources, Inc. (GWRS) : Free Stock Analysis Report
