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Martin Marietta Materials, Inc. (MLM) - free report >>
Heidelberg Materials AG Unsponsored ADR (HDELY) - free report >>
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Martin Marietta Materials, Inc. (MLM) - free report >>
Heidelberg Materials AG Unsponsored ADR (HDELY) - free report >>
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HDELY vs. MLM: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Building Products - Concrete and Aggregates sector have probably already heard of HeidelbergCement AG (HDELY - Free Report) and Martin Marietta (MLM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, HeidelbergCement AG is sporting a Zacks Rank of #2 (Buy), while Martin Marietta has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HDELY likely has seen a stronger improvement to its earnings outlook than MLM has recently. But this is only part of the picture for value investors.
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.
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.
HDELY currently has a forward P/E ratio of 6.15, while MLM has a forward P/E of 24.08. We also note that HDELY has a PEG ratio of 0.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MLM currently has a PEG ratio of 1.43.
Another notable valuation metric for HDELY is its P/B ratio of 0.53. 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, MLM has a P/B of 3.14.
Based on these metrics and many more, HDELY holds a Value grade of A, while MLM has a Value grade of C.
HDELY sticks out from MLM in both our Zacks Rank and Style Scores models, so value investors will likely feel that HDELY is the better option right now.