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Investors interested in Cosmetics stocks are likely familiar with Helen of Troy (HELE) and Estee Lauder (EL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Helen of Troy has a Zacks Rank of #2 (Buy), while Estee Lauder has a Zacks Rank of #3 (Hold). This means that HELE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HELE currently has a forward P/E ratio of 8.19, while EL has a forward P/E of 49.63. We also note that HELE has a PEG ratio of 1.64. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EL currently has a PEG ratio of 5.03.
Another notable valuation metric for HELE is its P/B ratio of 0.83. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EL has a P/B of 5.20.
These are just a few of the metrics contributing to HELE's Value grade of A and EL's Value grade of D.
HELE stands above EL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HELE is the superior value option right now.
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Helen of Troy Limited (HELE) : Free Stock Analysis Report
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report