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 Commercial Services & Supplies 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 Commercial Services & Supplies 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 Commercial Services & Supplies 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 Commercial Services & Supplies industry for Wednesday, October 23, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Commercial Services & Supplies 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.

Civeo Corporation’s Value Grade

Value Grade:

Civeo Corporation provides hospitality services to the natural resource industry in Canada, Australia, and the United States. The company develops lodges and villages; and mobile assets, including modular, skid-mounted accommodation, and central facilities that provide short to medium-term accommodation needs. It offers food, housekeeping, and maintenance services, as well as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security, and logistics services, and camp management services. In addition, the company provides development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management, and site construction services, as well as lodging and catering services. It serves oil, mining, engineering, and oilfield and mining service companies. Civeo Corporation was founded in 1977 and is headquartered in Houston, Texas.

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.

Civeo Corporation has a Value Score of 95, which is considered to be undervalued.

When you look at Civeo Corporation’s price-to-sales ratio at 0.58 compared to the industry median at 1.05, this company has a lower price relative to revenue compared to its peers. This could make Civeo Corporation’s stock more attractive for value investors.

Civeo Corporation’s price-earnings ratio is 11.80 compared to the industry median at 27.70. This means it has a lower share price relative to earnings compared to its peers. This could make Civeo Corporation more attractive for value investors.

Now, let’s assess Civeo Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 4.5, when compared to the industry median of 12.9, 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. Civeo Corporation’s shareholder yield is higher than its industry median ratio of 0.00%. 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. Civeo Corporation’s price-to-book ratio is lower than its industry median ratio of 2.03. This could make Civeo Corporation more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Civeo Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Civeo Corporation’s price-to-free-cash-flow ratio is lower than its industry median ratio of 17.00. This could make Civeo Corporation more attractive because the lower P/FCF ratio indicates that Civeo Corporation 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.

Matthews International Corporation’s Value Grade

Value Grade:

Matthews International Corporation provides brand solutions, memorialization products, and industrial technologies worldwide. It operates through three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions. The Memorialization segment provides bronze and granite memorials, upright granite memorials and monuments, concrete burial vaults, cremation memorialization products, granite benches, flower vases, crypt plates and letters, cremation urns, niche units, cemetery features, and statues, as well as bronze plaques, letters, emblems, vases, lights and photo ceramics, granite monuments, mausoleums, crypts, and flush memorials. The Industrial Technologies segment designs, manufactures, services, and distributes high-tech custom energy storage solutions, and product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking, and conveying consumer and industrial products. This segment also provides engineered calendaring, laminating, and coating equipment; stand-alone marking products; laser and ink-jet printing systems; and spare parts, calendar, and coating-roller refurbishing and retrofits. The SGK Brand solutions segment provides brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services for the consumer goods and retail industries. The company was founded in 1850 and is based in Pittsburgh, Pennsylvania.

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.

Matthews International Corporation has a Value Score of 61, which is considered to be undervalued.

Matthews International Corporation’s price-earnings ratio is 26.5 compared to the industry median at 27.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Matthews International Corporation more attractive for value investors.

Matthews International Corporation’s price-to-book ratio is higher than its peers. This could make Matthews International Corporation less attractive for value investors when compared to the industry median at 2.03.

You can read more about Matthews International 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.

Quad/Graphics, Inc.’s Value Grade

Value Grade:

Quad/Graphics, Inc. provides marketing solutions worldwide. The company operates through United States Print and Related Services, and International segments. It offers printing services, such as retail inserts, publications, catalogs, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, and other commercial and specialty printed products; and paper procurement services. The company also provides marketing and other services, including data and analytics, technology solutions, media services, creative and content solutions, managed services, and execution in non-print channels, as well as manufactures ink. It serves blue-chip companies that operate in various industries, and serve businesses and consumers across various industry verticals comprising retail, consumer packaged goods and direct-to-consumer, as well as financial services and health. The company was founded in 1971 and is headquartered in Sussex, Wisconsin.

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.

Quad/Graphics, Inc. has a Value Score of 96, which is considered to be undervalued.

Quad/Graphics, Inc.’s price-to-book ratio is lower than its peers. This could make Quad/Graphics, Inc. more attractive for value investors when compared to the industry median at 2.03.

You can read more about Quad/Graphics, 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.

Other Commercial Services & Supplies 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 Commercial Services & Supplies stocks as well as other industrys.

Choosing Which of the 3 Best Commercial Services & Supplies 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.

• Civeo Corporation stock has a Value Grade of A.
• Matthews International Corporation stock has a Value Grade of B.
• Quad/Graphics, Inc. stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Commercial Services & Supplies 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 Commercial Services & Supplies Stocks

Want to learn more about Commercial Services & Supplies 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 Commercial Services & Supplies Stocks for Wednesday, October 23
• 4 Undervalued Commercial Services & Supplies Stocks for Tuesday, October 22
• 4 Undervalued Commercial Services & Supplies Stocks for Monday, October 21
• 6 Undervalued Commercial Services & Supplies Stocks for Friday, October 18

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.