Yahoo Finance SRCL vs. WCN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Waste Removal Services sector have probably already heard of Stericycle (SRCL) and Waste Connections (WCN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Stericycle and Waste Connections have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
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.
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.
SRCL currently has a forward P/E ratio of 21.62, while WCN has a forward P/E of 32.71. We also note that SRCL has a PEG ratio of 2.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WCN currently has a PEG ratio of 2.91.
Another notable valuation metric for SRCL is its P/B ratio of 1.79. 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, WCN has a P/B of 5.27.
These metrics, and several others, help SRCL earn a Value grade of B, while WCN has been given a Value grade of C.
Both SRCL and WCN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SRCL is the superior value option right now.
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Stericycle, Inc. (SRCL) : Free Stock Analysis Report
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
