HCMLY vs. MAS: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Holcim Ltd Unsponsored ADR (HCMLY) and Masco (MAS). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Holcim Ltd Unsponsored ADR has a Zacks Rank of #2 (Buy), while Masco has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that HCMLY likely has seen a stronger improvement to its earnings outlook than MAS has recently. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
HCMLY currently has a forward P/E ratio of 12.34, while MAS has a forward P/E of 17.15. We also note that HCMLY has a PEG ratio of 3.84. 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. MAS currently has a PEG ratio of 3.88.
Another notable valuation metric for HCMLY is its P/B ratio of 1.41. 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, MAS has a P/B of 103.45.
These are just a few of the metrics contributing to HCMLY's Value grade of B and MAS's Value grade of C.
HCMLY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HCMLY is likely the superior value option right now.
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Holcim Ltd Unsponsored ADR (HCMLY) : Free Stock Analysis Report
Masco Corporation (MAS) : Free Stock Analysis Report