HCMLY vs. IBP: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Holcim Ltd Unsponsored ADR (HCMLY) and Installed Building Products (IBP). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair 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.

Holcim Ltd Unsponsored ADR has a Zacks Rank of #2 (Buy), while Installed Building Products has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that HCMLY likely has seen a stronger improvement to its earnings outlook than IBP 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

HCMLY currently has a forward P/E ratio of 18.12, while IBP has a forward P/E of 23.67. We also note that HCMLY 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. IBP currently has a PEG ratio of 3.54.

Another notable valuation metric for HCMLY is its P/B ratio of 2.52. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IBP has a P/B of 10.23.

These metrics, and several others, help HCMLY earn a Value grade of B, while IBP has been given a Value grade of D.

HCMLY sticks out from IBP in both our Zacks Rank and Style Scores models, so value investors will likely feel that HCMLY is the better option right now.

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Holcim Ltd Unsponsored ADR (HCMLY): Free Stock Analysis Report

Installed Building Products, Inc. (IBP): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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