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NCS or SSD: Which Is the Better Value Stock Right Now?


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Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either NCI Building Systems (NCS) or Simpson Manufacturing (SSD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

NCI Building Systems and Simpson Manufacturing are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NCS is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

NCS currently has a forward P/E ratio of 10.25, while SSD has a forward P/E of 23.92. We also note that NCS has a PEG ratio of 1.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SSD currently has a PEG ratio of 4.78.

Another notable valuation metric for NCS is its P/B ratio of 3.67. 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, SSD has a P/B of 3.75.

These are just a few of the metrics contributing to NCS's Value grade of A and SSD's Value grade of D.

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


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Simpson Manufacturing Company, Inc. (SSD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: NCS , SSD



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