HDLMY or ROAD: Which Is the Better Value Stock Right Now?

Zacks
08 Jan

Investors with an interest in Building Products - Miscellaneous stocks have likely encountered both Heidelberg Materials AG Unsponsored ADR (HDLMY) and Construction Partners (ROAD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Heidelberg Materials AG Unsponsored ADR and Construction Partners are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that HDLMY likely has seen a stronger improvement to its earnings outlook than ROAD has recently. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

HDLMY currently has a forward P/E ratio of 8.92, while ROAD has a forward P/E of 47.54. We also note that HDLMY has a PEG ratio of 0.80. 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. ROAD currently has a PEG ratio of 1.13.

Another notable valuation metric for HDLMY is its P/B ratio of 1.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ROAD has a P/B of 8.56.

These metrics, and several others, help HDLMY earn a Value grade of A, while ROAD has been given a Value grade of D.

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

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Heidelberg Materials AG Unsponsored ADR (HDLMY) : Free Stock Analysis Report

Construction Partners, Inc. (ROAD) : Free Stock Analysis Report

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