Zacks.com featured highlights include Plains GP, DNOW, Gibraltar Industries, Miller Industries and Sally Beauty

For Immediate Release

Chicago, IL – January 8, 2026 – Stocks in this week’s article are Plains GP Holdings, L.P. PAGP, DNOW Inc. DNOW, Gibraltar Industries, Inc. ROCK, Miller Industries, Inc. MLR and Sally Beauty Holdings, Inc. SBH.

5 Value Stocks with Alluring EV-to-EBITDA Ratios to Own Now

The price-to-earnings (P/E) multiple enjoys widespread popularity among investors seeking stocks trading at a bargain. In addition to being a widely used tool for screening stocks, P/E is a popular metric for working out the fair market value of a firm. However, even this straightforward, broadly used valuation metric has a few shortcomings.

While P/E enjoys great popularity among value investors, a less-used and more complicated metric called EV-to-EBITDA is sometimes viewed as a better alternative. EV-to-EBITDA gives the true picture of a company's valuation and earnings potential. It has a more comprehensive approach to valuation.

Plains GP Holdings, L.P., DNOW Inc., Gibraltar Industries, Inc., Miller Industries, Inc. and Sally Beauty Holdings, Inc. are some stocks with impressive EV-to-EBITDA ratios.

Is EV-to-EBITDA a Better Substitute to P/E?

EV-to-EBITDA is essentially the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company's market capitalization, its debt and preferred stock minus cash and cash equivalents. EBITDA, the other component of the multiple, gives a better idea of a company's profitability as it removes the impact of non-cash expenses like depreciation and amortization that reduce net earnings. It is also often used as a proxy for cash flows.

Just like P/E, the lower the EV-to-EBITDA ratio, the more attractive it is. A low EV-to-EBITDA ratio could signal that a stock is potentially undervalued. EV-to-EBITDA takes into account the debt on a company's balance sheet that the P/E ratio does not. For this reason, EV-to-EBITDA is generally used to value the potential acquisition targets as it shows the amount of debt the acquirer has to assume. Stocks boasting a low EV-to-EBITDA multiple could be seen as attractive takeover candidates.

Another shortcoming of P/E is that it can't be used to value a loss-making firm. A company's earnings are also subject to accounting estimates and management manipulation. On the other hand, EV-to-EBITDA is difficult to manipulate and can also be used to value loss-making but EBITDA-positive companies. EV-to-EBITDA is also a useful tool in measuring the value of firms that are highly leveraged and have a high degree of depreciation. Moreover, it can be used to compare companies with different levels of debt.

But EV-to-EBITDA has its limitations, too. The ratio varies across industries (a high-growth industry typically has a higher multiple and vice versa) and is usually not appropriate when comparing stocks in different industries, given their diverse capital requirements.

A strategy solely based on EV-to-EBITDA might not yield the desired results. However, you can club it with the other major ratios in your stock-investing toolbox, such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen value stocks.

Here are our five picks out of the 16 stocks that passed the screen:

Plains GP Holdings, through its subsidiaries, is involved in the transportation, storage, terminalling and marketing of crude oil and refined products. This Zacks Rank #1 stock has a Value Score of A.

Plains GP Holdings has an expected year-over-year earnings growth rate of 27% for 2026. The Zacks Consensus Estimate for PAGP's 2026 earnings has been revised 19.7% upward over the past 60 days.

DNOW is a leading energy and industrial solutions provider with a global network of distribution and engineering locations. This Zacks Rank #1 stock has a Value Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.

DNOW has an expected earnings growth rate of 18.5% for 2026. The consensus estimate for DNOW's 2026 earnings has been revised 2.1% upward over the past 60 days.

Gibraltar Industries manufactures and distributes products to the industrial and building markets. This Zacks Rank #2 stock has a Value Score of A.

Gibraltar Industries has an expected year-over-year earnings growth rate of 11% for 2026. The consensus estimate for ROCK's 2026 earnings has moved up 1.5% over over the past 60 days.

Miller Industries is a leading manufacturer of towing and recovery equipment. This Zacks Rank #2 stock has a Value Score of A.

Miller Industries has an expected year-over-year earnings growth rate of 139.5% for 2026. The Zacks Consensus Estimate for MLR's 2026 earnings has been revised 19.7% upward over the past 60 days.

Sally Beauty is an international specialty retailer and distributor of professional beauty supplies. This Zacks Rank #2 stock has a Value Score of A.

Sally Beauty has an expected year-over-year earnings growth rate of 8.4% for fiscal 2026. The consensus estimate for SBH's fiscal 2026 earnings has moved up 2.5% over over the past 60 days.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2813203/5-value-stocks-with-alluring-ev-to-ebitda-ratios-to-own-now

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

Follow us on Twitter:  https://www.twitter.com/zacksresearch

Join us on Facebook:  https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto

Company: Zacks.com

Phone: 312-265-9268

Email: [email protected]

Visit: https://www.zacks.com/

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research