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OSB or FND: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Updated
RLI Corp. (RLI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors with an interest in Building Products - Wood stocks have likely encountered both Norbord (OSB) and Floor & Decor Holdings, Inc. (FND). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Norbord and Floor & Decor Holdings, Inc. are holding a Zacks Rank of # 1 (Strong 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 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.

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The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

OSB currently has a forward P/E ratio of 7.26, while FND has a forward P/E of 50.49. We also note that OSB has a PEG ratio of 1.28. 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. FND currently has a PEG ratio of 1.92.

Another notable valuation metric for OSB is its P/B ratio of 3.07. 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, FND has a P/B of 9.99.

These metrics, and several others, help OSB earn a Value grade of B, while FND has been given a Value grade of D.

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


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Norbord Inc. (OSB) : Free Stock Analysis Report
 
Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report
 
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