SCSC vs. SITE: Which Stock Is the Better Value Option?
Investors interested in Industrial Services stocks are likely familiar with ScanSource (SCSC) and SiteOne Landscape (SITE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
ScanSource has a Zacks Rank of #2 (Buy), while SiteOne Landscape has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SCSC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
SCSC currently has a forward P/E ratio of 7.88, while SITE has a forward P/E of 39.37. We also note that SCSC has a PEG ratio of 0.79. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SITE currently has a PEG ratio of 8.07.
Another notable valuation metric for SCSC is its P/B ratio of 0.90. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SITE has a P/B of 4.89.
Based on these metrics and many more, SCSC holds a Value grade of A, while SITE has a Value grade of D.
SCSC has seen stronger estimate revision activity and sports more attractive valuation metrics than SITE, so it seems like value investors will conclude that SCSC is the superior option right now.
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ScanSource, Inc. (SCSC) : Free Stock Analysis Report
SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report
