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HCMLY vs. AWI: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Building Products - Miscellaneous sector have probably already heard of Holcim Ltd Unsponsored ADR (HCMLY - Free Report) and Armstrong World Industries (AWI - 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Holcim Ltd Unsponsored ADR and Armstrong World Industries are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

HCMLY currently has a forward P/E ratio of 13.40, while AWI has a forward P/E of 19.66. We also note that HCMLY has a PEG ratio of 1.68. 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. AWI currently has a PEG ratio of 1.74.

Another notable valuation metric for HCMLY is its P/B ratio of 1.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AWI has a P/B of 8.09.

These metrics, and several others, help HCMLY earn a Value grade of B, while AWI has been given a Value grade of C.

Both HCMLY and AWI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HCMLY is the superior value option right now.


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Armstrong World Industries, Inc. (AWI) - free report >>

Holcim Ltd Unsponsored ADR (HCMLY) - free report >>

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