HCMLY vs. AWI: Which Stock Is the Better Value Option?
Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both Holcim Ltd Unsponsored ADR (HCMLY) and Armstrong World Industries (AWI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Holcim Ltd Unsponsored ADR has a Zacks Rank of #1 (Strong Buy), while Armstrong World Industries has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HCMLY 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 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.
HCMLY currently has a forward P/E ratio of 13.88, while AWI has a forward P/E of 22.43. We also note that HCMLY has a PEG ratio of 1.89. 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. AWI currently has a PEG ratio of 1.99.
Another notable valuation metric for HCMLY is its P/B ratio of 1.80. 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, AWI has a P/B of 8.65.
These metrics, and several others, help HCMLY earn a Value grade of B, while AWI has been given a Value grade of C.
HCMLY has seen stronger estimate revision activity and sports more attractive valuation metrics than AWI, so it seems like value investors will conclude that HCMLY is the superior option right now.
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Holcim Ltd Unsponsored ADR (HCMLY) : Free Stock Analysis Report
Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report