Investors looking for stocks in the Industrial Services sector might want to consider either Hudson Technologies (HDSN) or 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Both Hudson Technologies and SiteOne Landscape have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
HDSN currently has a forward P/E ratio of 20.24, while SITE has a forward P/E of 40.19. We also note that HDSN has a PEG ratio of 0.67. 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. SITE currently has a PEG ratio of 2.39.
Another notable valuation metric for HDSN is its P/B ratio of 1.61. 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, SITE has a P/B of 3.82.
These metrics, and several others, help HDSN earn a Value grade of A, while SITE has been given a Value grade of C.
Both HDSN and SITE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HDSN is the superior value option right now.
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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).
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