CECE vs. DCI: Which Stock Is the Better Value Option?

Investors interested in Pollution Control stocks are likely familiar with CECO Environmental (CECE) and Donaldson (DCI). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.

Currently, CECO Environmental has a Zacks Rank of #2 (Buy), while Donaldson has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CECE likely has seen a stronger improvement to its earnings outlook than DCI has recently. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

CECE currently has a forward P/E ratio of 16.24, while DCI has a forward P/E of 18.26. We also note that CECE has a PEG ratio of 1.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DCI currently has a PEG ratio of 1.74.

Another notable valuation metric for CECE is its P/B ratio of 1.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, DCI has a P/B of 6.14.

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

CECE stands above DCI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CECE is the superior value option right now.

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CECO Environmental Corp. (CECE) : Free Stock Analysis Report
 
Donaldson Company, Inc. (DCI) : Free Stock Analysis Report
 
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