Analyzing MEG and WM Through the Lens of Value Investing Metrics

2026-01-12 18:35:56

When evaluating waste management sector stocks for potential undervaluation, two names frequently emerge: Montrose Environmental (MEG) and Waste Management (WM). Understanding how these companies perform across key valuation indicators can help investors make more informed decisions.

Investment Rating Framework and Earnings Outlook

The approach to identifying value opportunities typically combines strong earnings estimate revisions with a robust ranking system. MEG currently holds a Zacks Rank of #2 (Buy), reflecting more dynamic analyst activity around its earnings projections. In contrast, WM carries a Zacks Rank of #3 (Hold), suggesting a more measured outlook. For value-focused investors, this distinction matters because it indicates the degree of confidence analysts place in future earnings performance.

Valuation Metrics Comparison: The Numbers Tell the Story

When examining traditional valuation indicators, several key metrics emerge as particularly revealing:

Price-to-Earnings Analysis: MEG trades at a forward P/E ratio of 17.40, substantially lower than WM’s 26.28. This initial gap provides important context for value investors assessing current pricing relative to expected earnings.

Growth-Adjusted Valuation: The PEG ratio offers a more nuanced perspective by factoring in expected earnings growth. MEG’s PEG ratio stands at 0.91, while WM’s reaches 2.44. This significant differential suggests MEG may offer more attractive growth-adjusted pricing.

Book Value Assessment: The price-to-book metric reveals another meaningful divergence. MEG’s P/B ratio of 1.98 compares favorably against WM’s 9.22, indicating different market valuations relative to net asset values.

Style Score Evaluation and Overall Assessment

These metrics collectively contribute to comprehensive style scoring. MEG earns a Value grade of B, while WM receives a C grade. Based on this multi-factor analysis combining earnings revision momentum, valuation ratios, and fundamental metrics, MEG presents a more compelling value proposition for investors seeking undervalued opportunities in the waste management sector at current price levels.

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