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Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Marks and Spencer Group PLC (MAKSY) or Walmart (WMT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MAKSY has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MAKSY currently has a forward P/E ratio of 13.47, while WMT has a forward P/E of 37.46. We also note that MAKSY has a PEG ratio of 1.22. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WMT currently has a PEG ratio of 4.40.
Another notable valuation metric for MAKSY is its P/B ratio of 2.76. 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, WMT has a P/B of 7.90.
These are just a few of the metrics contributing to MAKSY's Value grade of A and WMT's Value grade of C.
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