BECN vs. FAST: Which Stock Is the Better Value Option?

Investors with an interest in Building Products – Retail stocks have likely encountered both Beacon Roofing Supply (BECN) and Fastenal (FAST). 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Both Beacon Roofing Supply and Fastenal have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks 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 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.

BECN currently has a forward P/E ratio of 11.84, while FAST has a forward P/E of 21.42. We also note that BECN has a PEG ratio of 0.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. FAST currently has a PEG ratio of 1.34.

Another notable valuation metric for BECN is its P/B ratio of 1.32. 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, FAST has a P/B of 7.55.

These are just a few of the metrics contributing to BECN’s Value grade of A and FAST’s Value grade of C.

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

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