Investors interested in Building Products - Concrete and Aggregates stocks are likely familiar with Cemex (CX) and Martin Marietta (MLM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Cemex and Martin Marietta are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
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.
CX currently has a forward P/E ratio of 11.03, while MLM has a forward P/E of 32.61. We also note that CX has a PEG ratio of 1.16. 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. MLM currently has a PEG ratio of 5.59.
Another notable valuation metric for CX is its P/B ratio of 1.06. 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, MLM has a P/B of 3.99.
Based on these metrics and many more, CX holds a Value grade of B, while MLM has a Value grade of D.
Both CX and MLM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CX is the superior value option right now.
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Cemex S.A.B. de C.V. (CX): Free Stock Analysis Report Martin Marietta Materials, Inc. (MLM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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