Which stock offers the better value option?

Investors interested in environmental protection stocks are likely familiar with CECO Environmental (CECO) and Casella (CWST). But which of these two companies is the best option for those looking for undervalued stocks? Let’s take a closer look.

Everyone has their own methods for finding great value opportunities, but our model combines an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank places an emphasis on earnings estimates and estimate revisions, while our Style Scores aim to identify stocks with specific traits.

Currently, CECO Environmental has a Zacks Rank of #2 (Buy), while Casella has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can be confident that CECO has an improving earnings outlook. But that’s only one piece of the puzzle for value investors.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current price levels.

Our Value category highlights undervalued companies by looking at a number of key metrics, including the popular P/E ratio, as well as P/S, earnings yield, cash flow per share, and a number of other fundamental metrics that value investors have used for years.

CECO currently has a forward P/E ratio of 15.95, while CWST has a forward P/E ratio of 64.35. We also note that CECO has a PEG ratio of 1.06. This popular number is similar to the widely used P/E ratio, but the PEG ratio also takes into account a company’s expected EPS growth rate. CWST currently has a PEG ratio of 3.95.

Another important valuation metric for CECO is its P/B ratio of 2.35. The P/B ratio is used to compare the market value of a stock to its book value, which is defined as total assets minus total liabilities. For comparison, CWST has a P/B ratio of 8.08.

These are just some of the metrics that contribute to the B rating for CECO and the D rating for CWST.

CECO currently has an improving earnings outlook, which makes it stand out in our Zacks Rank model. And based on the valuation metrics mentioned above, we believe CECO is probably the better value option right now.

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CECO Environmental Corp. (CECO): Free Stock Analysis Report

Casella Waste Systems, Inc. (CWST): Free Stock Analysis Report

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