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URI or GCP: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Building Products - Miscellaneous sector might want to consider either United Rentals (URI) or GCP Applied Technologies (GCP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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, United Rentals is sporting a Zacks Rank of #2 (Buy), while GCP Applied Technologies has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that URI likely has seen a stronger improvement to its earnings outlook than GCP 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 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.

URI currently has a forward P/E ratio of 6.62, while GCP has a forward P/E of 26.57. We also note that URI has a PEG ratio of 0.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GCP currently has a PEG ratio of 1.48.

Another notable valuation metric for URI is its P/B ratio of 2.60. 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, GCP has a P/B of 3.97.

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

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

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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.


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

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