5 Value Stocks With Alluring EV-to-EBITDA Ratios to Scoop Up

AMC Global Media Inc. AMCX, Lifetime Brands, Inc. LCUT, OptimumBank Holdings, Inc. OPHC, EnerSys ENS and First American Financial Corporation FAF are some stocks with impressive EV-to-EBITDA ratios.

Why EV-to-EBITDA is a Better Alternative?

EV-to-EBITDA is essentially the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company’s market capitalization, its debt and preferred stock minus cash and cash equivalents. EBITDA, the other component of the multiple, gives a better idea of a company’s profitability as it removes the impact of non-cash expenses like depreciation and amortization that reduce net earnings. It is also often used as a proxy for cash flows.

Just like P/E, the lower the EV-to-EBITDA ratio, the more attractive it is. A low EV-to-EBITDA ratio could signal that a stock is potentially undervalued. EV-to-EBITDA takes into account the debt on a company’s balance sheet that P/E ratio does not. For this reason, EV-to-EBITDA is generally used to value the potential acquisition targets as it shows the amount of debt the acquirer has to assume. Stocks boasting a low EV-to-EBITDA multiple could be seen as attractive takeover candidates.

P/E can’t be used to value a loss-making firm. A firm’s earnings are also subject to accounting estimates and management manipulation. In contrast, EV-to-EBITDA is harder to manipulate and can be used to value companies that have negative net earnings but are positive on the EBITDA front. EV-to-EBITDA is also a useful tool in measuring the value of firms that are highly leveraged and have a high degree of depreciation. It can also be used to compare companies with different levels of debt.

But EV-to-EBITDA has its shortcomings, too. The ratio varies across industries (a high-growth industry typically has a higher multiple and vice versa). It is usually not appropriate when comparing stocks from different industries, given their diverse capital requirements.

A strategy solely based on EV-to-EBITDA might not yield the desired results. However, you can club it with the other major ratios in your stock-investing toolbox, such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen value stocks.

Screening Criteria

Here are the parameters to screen for value stocks:

EV-to-EBITDA 12 Months-Most Recent less than X-Industry Median: A lower EV-to-EBITDA ratio represents a cheaper valuation.

P/E using (F1) less than X-Industry Median: This metric screens stocks that are trading at a discount to their peers.

P/B less than X-Industry Median: A lower P/B compared with the industry average implies that the stock is undervalued.

P/S less than X-Industry Median: The lower the P/S ratio, the more attractive the stock is, as investors will have to pay a smaller price for the same amount of sales generated by the company.

Estimated One-Year EPS Growth F(1)/F(0) greater than or equal to X-Industry Median: This parameter will help in screening stocks that have growth rates higher than the industry median. 

Average 20-day Volume greater than or equal to 100,000: The addition of this metric ensures that shares can be traded easily.

Current Price greater than or equal to $5: This parameter will help in screening stocks that are trading at a minimum price of $5 or higher.

Zacks Rank less than or equal to 2: It is a fundamental truth that stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have always managed to beat adversities and outperform the market.

Value Score of less than or equal to B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.

Here are our five picks out of the 17 stocks that passed the screen:

AMC Global Media is an entertainment company that distributes content worldwide. This Zacks Rank #1 stock has a Value Score of A.

AMC Global Media has an expected year-over-year earnings growth rate of 36.5% for 2026. The Zacks Consensus Estimate for AMCX’s 2026 earnings has been revised 53% higher over the last 60 days.

Lifetime Brands is a leading global provider of branded kitchenware, tableware and other products. This Zacks Rank #1 stock has a Value Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lifetime Brands has an expected year-over-year earnings growth rate of 156.8% for 2026. The consensus estimate for LCUT’s 2026 earnings has moved up 184.9% over the past 60 days.

OptimumBank offers real estate lending and retail banking products to individuals and businesses. This Zacks Rank #1 stock has a Value Score of A.

OptimumBank has an expected year-over-year earnings growth rate of 39.4% for 2026. The Zacks Consensus Estimate for OPHC’s 2026 earnings has been revised 16.5% higher over the last 60 days.

EnerSys engages in manufacturing, marketing and distribution of various industrial batteries. This Zacks Rank #1 stock has a Value Score of B.

EnerSys has an expected year-over-year earnings growth rate of 23.1% for 2026. The consensus estimate for ENS’ 2026 earnings has been revised 7.4% upward over the past 60 days.

First American Financial serves homebuyers and sellers, real estate professionals, loan originators and servicers, commercial property professionals, homebuilders and others involved in residential and commercial property transactions with products and services specific to their needs. This Zacks Rank #2 stock has a Value Score of A. 

First American Financial has an expected earnings growth rate of 17.5% for 2026. The Zacks Consensus Estimate for FAF’s 2026 earnings has been revised 4.4% upward over the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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