MTZ vs. DY: Which Stock Is the Better Value Option?
Investors interested in Building Products - Heavy Construction stocks are likely familiar with MasTec (MTZ) and Dycom Industries (DY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 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.
Currently, both MasTec and Dycom Industries are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
MTZ currently has a forward P/E ratio of 13.49, while DY has a forward P/E of 26.67. We also note that MTZ has a PEG ratio of 1.69. 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. DY currently has a PEG ratio of 3.14.
Another notable valuation metric for MTZ is its P/B ratio of 2.68. 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, DY has a P/B of 3.
These metrics, and several others, help MTZ earn a Value grade of B, while DY has been given a Value grade of C.
Both MTZ and DY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MTZ is the superior value option right now.
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MasTec, Inc. (MTZ) : Free Stock Analysis Report
Dycom Industries, Inc. (DY) : Free Stock Analysis Report
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