Investors interested in Retail - Supermarkets stocks are likely familiar with Marks and Spencer Group PLC (MAKSY) and Walmart (WMT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Marks and Spencer Group PLC is sporting a Zacks Rank of #2 (Buy), while Walmart has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MAKSY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
MAKSY currently has a forward P/E ratio of 12.81, while WMT has a forward P/E of 35.67. We also note that MAKSY has a PEG ratio of 1.01. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WMT currently has a PEG ratio of 4.98.
Another notable valuation metric for MAKSY is its P/B ratio of 2.70. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WMT has a P/B of 7.65.
Based on these metrics and many more, MAKSY holds a Value grade of A, while WMT has a Value grade of D.
MAKSY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MAKSY is likely the superior value option right now.
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Marks and Spencer Group PLC (MAKSY): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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