Which stock offers the better value option?

Investors looking for stocks in the Building Products – Other sector should consider either TopBuild (BLD) or GCP Applied Technologies (GCP). But which of these two stocks offers investors the better value opportunity right now? Let’s take a closer look.

The best way to find great value stocks is to combine a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

TopBuild currently has a Zacks Rank of #1 (Strong Buy), while GCP Applied Technologies currently has a Zacks Rank of #4 (Sell). This system places emphasis on companies that have seen positive earnings estimate revisions, so investors should feel confident that BLD’s earnings outlook is likely to improve on a larger scale. But that’s only one factor that value investors care about.

Value investors also try to analyze a wide range of traditional numbers and metrics to determine whether a company is undervalued at its current share price level.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

BLD currently has a forward P/E ratio of 16.44, while GCP has a forward P/E ratio of 24.09. We also note that BLD has a PEG ratio of 0.59. 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. GCP currently has a PEG ratio of 1.34.

Another important valuation metric for BLD is its P/B ratio of 2.56. 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, GCP has a P/B ratio of 3.70.

These are just some of the metrics that contribute to the B score for BLD and the D score for GCP.

BLD is outperforming GCP thanks to its solid earnings outlook, and based on these valuation numbers, we also believe BLD is the better value option currently.

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TopBuild Corp. (BLD): Free Stock Analysis Report

GCP Applied Technologies Inc. (GCP): Free Stock Analysis Report

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