Investors with an interest in Industrial Services stocks have likely encountered both Hudson Technologies (HDSN) and SiteOne Landscape (SITE). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Hudson Technologies and SiteOne Landscape are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that HDSN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HDSN currently has a forward P/E ratio of 20.19, while SITE has a forward P/E of 42.85. We also note that HDSN has a PEG ratio of 0.67. 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 2.49.
Another notable valuation metric for HDSN is its P/B ratio of 1.67. 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, SITE has a P/B of 3.77.
Based on these metrics and many more, HDSN holds a Value grade of A, while SITE has a Value grade of C.
HDSN sticks out from SITE in both our Zacks Rank and Style Scores models, so value investors will likely feel that HDSN is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hudson Technologies, Inc. (HDSN): Free Stock Analysis Report SiteOne Landscape Supply, Inc. (SITE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
