HCMLY or IBP: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either Holcim Ltd Unsponsored ADR (HCMLY) or Installed Building Products (IBP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Holcim Ltd Unsponsored ADR is sporting a Zacks Rank of #2 (Buy), while Installed Building Products has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that HCMLY likely has seen a stronger improvement to its earnings outlook than IBP has recently. However, value investors will care about much more than just this.

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

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

HCMLY currently has a forward P/E ratio of 18.23, while IBP has a forward P/E of 26.98. We also note that HCMLY has a PEG ratio of 0.59. 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. IBP currently has a PEG ratio of 4.04.

Another notable valuation metric for HCMLY is its P/B ratio of 2.55. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IBP has a P/B of 11.69.

These are just a few of the metrics contributing to HCMLY's Value grade of B and IBP's Value grade of F.

HCMLY stands above IBP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HCMLY is the superior value option right now.