Yahoo Finance NX or WMS: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Quanex Building Products (NX) and Advanced Drainage Systems (WMS). 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.
Currently, Quanex Building Products has a Zacks Rank of #1 (Strong Buy), while Advanced Drainage Systems has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NX has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
NX currently has a forward P/E ratio of 12.70, while WMS has a forward P/E of 22.71. We also note that NX has a PEG ratio of 0.91. 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. WMS currently has a PEG ratio of 1.34.
Another notable valuation metric for NX is its P/B ratio of 1.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WMS has a P/B of 10.78.
These metrics, and several others, help NX earn a Value grade of A, while WMS has been given a Value grade of C.
NX has seen stronger estimate revision activity and sports more attractive valuation metrics than WMS, so it seems like value investors will conclude that NX is the superior option right now.
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Quanex Building Products Corporation (NX) : Free Stock Analysis Report
Advanced Drainage Systems, Inc. (WMS) : Free Stock Analysis Report
