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Investors interested in Retail - Supermarkets stocks are likely familiar with Marks and Spencer Group PLC (MAKSY) and Wal-Mart de Mexico SAB de CV (WMMVY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Marks and Spencer Group PLC and Wal-Mart de Mexico SAB de CV are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. 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 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.
MAKSY currently has a forward P/E ratio of 12.44, while WMMVY has a forward P/E of 16.57. We also note that MAKSY has a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WMMVY currently has a PEG ratio of 2.29.
Another notable valuation metric for MAKSY is its P/B ratio of 2.31. 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, WMMVY has a P/B of 3.79.
Based on these metrics and many more, MAKSY holds a Value grade of A, while WMMVY has a Value grade of C.
MAKSY sticks out from WMMVY in both our Zacks Rank and Style Scores models, so value investors will likely feel that MAKSY is the better option right now.
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Marks and Spencer Group PLC (MAKSY) : Free Stock Analysis Report
Wal-Mart de Mexico SAB de CV (WMMVY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).