5 Value Stocks With Impressive EV-to-EBITDA Ratios to Own Now

The article advocates for Enterprise Value-to-EBITDA (EV-to-EBITDA) as a more comprehensive valuation metric than the traditional Price-to-Earnings (P/E) ratio, particularly for identifying value stocks. EV-to-EBITDA accounts for debt and non-cash expenses, offering a clearer picture of a company's true value and earnings potential, making it suitable for valuing leveraged firms or potential acquisition targets. While acknowledging its industry-specific limitations, the article screens five stocks—Affiliated Managers Group (AMG), Koninklijke Ahold Delhaize (ADRNY), Noah Holdings (NOAH), Plains GP Holdings (PAGP), and Gibraltar Industries (ROCK)—based on attractive EV-to-EBITDA ratios, strong growth projections, and high Zacks Ranks, presenting them as current investment opportunities.

Analysis

This analysis highlights a selection of five value stocks—AMG, ADRNY, NOAH, PAGP, and ROCK—identified through a quantitative screen that prioritizes a low Enterprise Value-to-EBITDA (EV/EBITDA) ratio. The core thesis is that EV/EBITDA offers a more comprehensive valuation picture than the traditional P/E ratio by incorporating debt, making these stocks potentially undervalued and attractive acquisition targets. The selection is further supported by stringent criteria including P/E, P/B, and P/S ratios below industry medians, ensuring broad-based value characteristics. Critically, these stocks are not just cheap; they exhibit strong forward-looking growth, with expected 2025 year-over-year earnings growth ranging from 7.6% for Ahold Delhaize (ADRNY) to a significant 157.7% for Plains GP Holdings (PAGP). This growth outlook is bolstered by recent positive analyst revisions, with 2025 consensus earnings estimates moving up for four of the five companies in the past 60 days, most notably for Noah Holdings (NOAH) at +4.6% and Affiliated Managers Group (AMG) at +4.5%. The combination of favorable valuation, strong growth forecasts, and positive sentiment signals, as indicated by high Zacks Ranks and Value Scores, presents a compelling fundamental case for this diversified group of equities.

Key Decisions for Investors

• Investors managing value or GARP (Growth at a Reasonable Price) mandates should consider these five names, as they have been screened for both attractive valuation multiples and superior-than-industry growth projections.
• The exceptionally high expected 2025 earnings growth for Plains GP Holdings (PAGP) at 157.7% and Noah Holdings (NOAH) at 28% warrants specific attention for portfolios with a higher risk tolerance for growth-centric opportunities.
• Given that a low EV/EBITDA ratio can signal takeover potential, these stocks should be monitored for any M&A-related news or industry consolidation trends which could serve as a powerful catalyst.
• While the screen is robust, investors should evaluate each company within its specific industry context, as the article notes that EV/EBITDA multiples vary significantly across sectors and a diversified approach is prudent.