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Investors interested in Retail - Supermarkets stocks are likely familiar with Wal-Mart de Mexico SAB de CV (WMMVY) 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.
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 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, both Wal-Mart de Mexico SAB de CV and Walmart are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
WMMVY currently has a forward P/E ratio of 15.85, while WMT has a forward P/E of 39.35. We also note that WMMVY has a PEG ratio of 1.93. 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. WMT currently has a PEG ratio of 4.46.
Another notable valuation metric for WMMVY is its P/B ratio of 4.27. 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 8.30.
Based on these metrics and many more, WMMVY holds a Value grade of B, while WMT has a Value grade of D.
Both WMMVY and WMT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WMMVY is the superior value option right now.
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Wal-Mart de Mexico SAB de CV (WMMVY) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report