VEOEY vs. GWRS: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Utility - Water Supply sector have probably already heard of Veolia Environnement SA (VEOEY) and Global Water Resources, Inc. (GWRS). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Veolia Environnement SA is sporting a Zacks Rank of #2 (Buy), while Global Water Resources, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that VEOEY likely has seen a stronger improvement to its earnings outlook than GWRS has recently. However, value investors will care about much more than just this.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
VEOEY currently has a forward P/E ratio of 18.93, while GWRS has a forward P/E of 79.13. We also note that VEOEY has a PEG ratio of 1.95. 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. GWRS currently has a PEG ratio of 5.28.
Another notable valuation metric for VEOEY is its P/B ratio of 2.18. 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, GWRS has a P/B of 10.34.
These are just a few of the metrics contributing to VEOEY's Value grade of A and GWRS's Value grade of D.
VEOEY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VEOEY is likely the superior value option right now.
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Veolia Environnement SA (VEOEY) : Free Stock Analysis Report
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