Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Personal Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Personal Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Personal Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Personal Services industry for Wednesday, April 10, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Personal Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Carriage Services, Inc.’s Value Grade

Value Grade:

Carriage Services, Inc. is a provider of funeral and cemetery services and merchandise in the United States. Its Funeral home and cemetery businesses provide products and services to families in three areas: ceremony and tribute, generally in the form of a funeral or memorial service; disposition of remains, either through burial or cremation, and memorialization, generally through monuments, markers or inscriptions. Its funeral homes offer a complete range of services to meet a family's funeral needs, consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. Its Cemeteries provides interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Carriage Services, Inc. has a Value Score of 69, which is considered to be undervalued.

When you look at Carriage Services, Inc.’s price-to-sales ratio at 0.98 compared to the industry median at 0.98, this company has a higher price relative to revenue compared to its peers. This could make Carriage Services, Inc.’s stock fairly attractive for value investors.

Carriage Services, Inc.’s price-earnings ratio is 11.78 compared to the industry median at 14.73. This means it has a lower share price relative to earnings compared to its peers. This could make Carriage Services, Inc. more attractive for value investors.

Now, let’s assess Carriage Services, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 9.2, when compared to the industry median of 11.0, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Carriage Services, Inc.’s shareholder yield is lower than its industry median ratio of 1.41%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Carriage Services, Inc.’s price-to-book ratio is lower than its industry median ratio of 4.11. This could make Carriage Services, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Carriage Services, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Carriage Services, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 18.17. This could make Carriage Services, Inc. more attractive because the lower P/FCF ratio indicates that Carriage Services, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Grove Collaborative Holdings Inc’s Value Grade

Value Grade:

Grove Collaborative Holdings, Inc. is a consumer products company. The Company use its connection with consumers to create and curate authentic, disruptive brands and products. It creates and curates more than 200 high-performing eco-friendly brands of household cleaning, personal care, laundry, clean beauty, baby and pet care products serving millions of households across the United States. Its omnichannel distribution strategy enables it to reach consumers where they want to shop. It operates an online direct-to-consumer Website and mobile application (DTC platform) where it both sell its Grove-owned brands (Grove Brands) and partners with other natural and mission-based consumer packaged goods (CPG) brands, providing consumers the selection of curated products across many categories and brands. Its flagship brand is The Grove Co. Its incubator brand portfolio includes Peach, Rooted Beauty, Superbloom and Honu. The Company also offers third-party brands.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Grove Collaborative Holdings Inc has a Value Score of 75, which is considered to be undervalued.

Grove Collaborative Holdings Inc’s price-to-book ratio is lower than its peers. This could make Grove Collaborative Holdings Inc more attractive for value investors when compared to the industry median at 4.11.

You can read more about Grove Collaborative Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Kid Castle Educational Corporation’s Value Grade

Value Grade:

Kid Castle Educational Corporation (Kid Castle) started with a single school back in 1986, and has steadily expanded through Taiwan and across China. Today, the Company has more than 200 branches in Taiwan and more than 200 in Mainland China. The Company also publishes textbooks, curricula, audio-visual media, and other teaching resources. The Company supplies education materials to over 7000 schools, including elementary schools and privately owned schools in Taiwan and China. From neighborhood schools to giant campuses, the Company’s branches are all shapes and sizes. The Company’s schools are individually owned and operated, so each branch retains its own look and feel. Many of the Company’s branches have the following facilities: a library, a computer lab, a music room and a stage. The larger branches, which connect to a preschool, have playgrounds, jungle gyms, vegetable gardens, aviaries, wading pools, seating areas, running tracks and other outdoor facilities.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Kid Castle Educational Corporation has a Value Score of 96, which is considered to be undervalued.

Kid Castle Educational Corporation’s price-to-book ratio is higher than its peers. This could make Kid Castle Educational Corporation less attractive for value investors when compared to the industry median at 4.11.

You can read more about Kid Castle Educational Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Personal Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Personal Services stocks as well as other industrys.

Choosing Which of the 3 Best Personal Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Carriage Services, Inc. stock has a Value Grade of B.
• Grove Collaborative Holdings Inc stock has a Value Grade of B.
• Kid Castle Educational Corporation stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Personal Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Personal Services Stocks

Want to learn more about Personal Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Personal Services Stocks for Wednesday, April 10
• Why Mister Car Wash Inc’s (MCW) Stock Is Down 4.65%
• Why Driven Brands Holdings Inc’s (DRVN) Stock Is Up 5.60%
• Why Mister Car Wash Inc’s (MCW) Stock Is Up 4.57%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.