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AEGN or MAS: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either Aegion (AEGN) or Masco (MAS). 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.

Aegion and Masco are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that AEGN likely has seen a stronger improvement to its earnings outlook than MAS has recently. But this is just one piece of the puzzle 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

AEGN currently has a forward P/E ratio of 17.69, while MAS has a forward P/E of 17.84. We also note that AEGN has a PEG ratio of 1.77. 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 2.17.

Another notable valuation metric for AEGN is its P/B ratio of 1.55. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MAS has a P/B of 582.06.

These are just a few of the metrics contributing to AEGN's Value grade of B and MAS's Value grade of C.

AEGN 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 AEGN is likely the superior value option right now.


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Aegion Corporation (AEGN) : Free Stock Analysis Report
 
Masco Corporation (MAS) : Free Stock Analysis Report
 
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