SRCL or WCN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Waste Removal Services sector might want to consider either Stericycle (SRCL) or Waste Connections (WCN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Stericycle has a Zacks Rank of #2 (Buy), while Waste Connections has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that SRCL likely has seen a stronger improvement to its earnings outlook than WCN 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SRCL currently has a forward P/E ratio of 24.08, while WCN has a forward P/E of 34.30. We also note that SRCL has a PEG ratio of 3.01. 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 3.07.
Another notable valuation metric for SRCL is its P/B ratio of 1.72. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WCN has a P/B of 5.11.
These are just a few of the metrics contributing to SRCL's Value grade of B and WCN's Value grade of C.
SRCL sticks out from WCN in both our Zacks Rank and Style Scores models, so value investors will likely feel that SRCL is the better option right now.
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Stericycle, Inc. (SRCL) : Free Stock Analysis Report
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
