Investors interested in stocks from the Waste Removal Services sector have probably already heard of Quest Resource (QRHC) and Stericycle (SRCL). 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 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.
Right now, Quest Resource is sporting a Zacks Rank of #2 (Buy), while Stericycle has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that QRHC likely has seen a stronger improvement to its earnings outlook than SRCL 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 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.
QRHC currently has a forward P/E ratio of 24, while SRCL has a forward P/E of 29.37. We also note that QRHC has a PEG ratio of 1.60. 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. SRCL currently has a PEG ratio of 4.50.
Another notable valuation metric for QRHC is its P/B ratio of 0.47. 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, SRCL has a P/B of 2.51.
Based on these metrics and many more, QRHC holds a Value grade of B, while SRCL has a Value grade of C.
QRHC stands above SRCL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that QRHC is the superior value option right now.
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Quest Resource Holding Corporation. (QRHC): Free Stock Analysis Report
Stericycle, Inc. (SRCL): 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.