Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Carrefour SA (CRRFY) and Walmart (WMT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Carrefour SA is sporting a Zacks Rank of #2 (Buy), while Walmart has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CRRFY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CRRFY currently has a forward P/E ratio of 9.20, while WMT has a forward P/E of 37.25. We also note that CRRFY has a PEG ratio of 0.84. 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 4.83.
Another notable valuation metric for CRRFY is its P/B ratio of 0.80. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WMT has a P/B of 8.53.
Based on these metrics and many more, CRRFY holds a Value grade of A, while WMT has a Value grade of C.
CRRFY has seen stronger estimate revision activity and sports more attractive valuation metrics than WMT, so it seems like value investors will conclude that CRRFY is the superior option right now.
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Carrefour SA (CRRFY): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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