Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either NWPX Infrastructure (NWPX) or Jacobs Solutions (J). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
NWPX Infrastructure has a Zacks Rank of #2 (Buy), while Jacobs Solutions has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that NWPX likely has seen a stronger improvement to its earnings outlook than J has recently. But this is just one factor that value investors are interested in.
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 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.
NWPX currently has a forward P/E ratio of 18.42, while J has a forward P/E of 22.34. We also note that NWPX has a PEG ratio of 1.67. 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. J currently has a PEG ratio of 1.84.
Another notable valuation metric for NWPX is its P/B ratio of 1.5. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, J has a P/B of 4.86.
These are just a few of the metrics contributing to NWPX's Value grade of A and J's Value grade of C.
NWPX has seen stronger estimate revision activity and sports more attractive valuation metrics than J, so it seems like value investors will conclude that NWPX is the superior option right now.
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NWPX Infrastructure, Inc. (NWPX): Free Stock Analysis Report Jacobs Solutions Inc. (J): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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