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DLTR or ROST: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Dollar Tree (DLTR - Free Report) and Ross Stores (ROST - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Dollar Tree and Ross Stores are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DLTR has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
DLTR currently has a forward P/E ratio of 17.60, while ROST has a forward P/E of 26.49. We also note that DLTR has a PEG ratio of 1.62. 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. ROST currently has a PEG ratio of 2.65.
Another notable valuation metric for DLTR is its P/B ratio of 3.66. 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, ROST has a P/B of 14.06.
These are just a few of the metrics contributing to DLTR's Value grade of B and ROST's Value grade of C.
DLTR has seen stronger estimate revision activity and sports more attractive valuation metrics than ROST, so it seems like value investors will conclude that DLTR is the superior option right now.
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DLTR or ROST: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Dollar Tree (DLTR - Free Report) and Ross Stores (ROST - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Dollar Tree and Ross Stores are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DLTR has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
DLTR currently has a forward P/E ratio of 17.60, while ROST has a forward P/E of 26.49. We also note that DLTR has a PEG ratio of 1.62. 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. ROST currently has a PEG ratio of 2.65.
Another notable valuation metric for DLTR is its P/B ratio of 3.66. 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, ROST has a P/B of 14.06.
These are just a few of the metrics contributing to DLTR's Value grade of B and ROST's Value grade of C.
DLTR has seen stronger estimate revision activity and sports more attractive valuation metrics than ROST, so it seems like value investors will conclude that DLTR is the superior option right now.