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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 Is the Better Value Option?
Investors looking for stocks in the Building Products - Concrete and Aggregates sector might want to consider either HeidelbergCement AG (HDELY - Free Report) or Martin Marietta (MLM - Free Report) . 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
HeidelbergCement AG has a Zacks Rank of #2 (Buy), while Martin Marietta has a Zacks Rank of #3 (Hold) right now. This means that HDELY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
HDELY currently has a forward P/E ratio of 8.37, while MLM has a forward P/E of 24.44. We also note that HDELY has a PEG ratio of 1.25. 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. MLM currently has a PEG ratio of 1.87.
Another notable valuation metric for HDELY is its P/B ratio of 0.72. 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, MLM has a P/B of 3.12.
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.