Investors looking for stocks in the Waste Removal Services sector might want to consider either Veolia Environnement SA (VEOEY) or Waste Management (WM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Veolia Environnement SA has a Zacks Rank of #2 (Buy), while Waste Management has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VEOEY has an improving earnings 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.
VEOEY currently has a forward P/E ratio of 14.30, while WM has a forward P/E of 28.78. We also note that VEOEY has a PEG ratio of 1.32. 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. WM currently has a PEG ratio of 2.48.
Another notable valuation metric for VEOEY is its P/B ratio of 2. 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, WM has a P/B of 9.46.
Based on these metrics and many more, VEOEY holds a Value grade of B, while WM has a Value grade of C.
VEOEY stands above WM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VEOEY is the superior value option right now.
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Veolia Environnement SA (VEOEY): Free Stock Analysis Report Waste Management, Inc. (WM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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