Investors interested in stocks from the Pollution Control sector have probably already heard of CECO Environmental (CECE) and Sharps Compliance (SMED). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
CECO Environmental has a Zacks Rank of #2 (Buy), while Sharps Compliance has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CECE likely has seen a stronger improvement to its earnings outlook than SMED has recently. But this is just one piece of the puzzle 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 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 12.73, while SMED has a forward P/E of 50.05. We also note that CECE has a PEG ratio of 0.85. 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. SMED currently has a PEG ratio of 2.18.
Another notable valuation metric for CECE is its P/B ratio of 1.11. 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, SMED has a P/B of 3.79.
These metrics, and several others, help CECE earn a Value grade of B, while SMED has been given a Value grade of C.
CECE stands above SMED 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
Sharps Compliance Corp (SMED) : Free Stock Analysis Report
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