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ITOCY vs. TSCO: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Itochu Corp. (ITOCY - Free Report) or Tractor Supply (TSCO - 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Itochu Corp. and Tractor Supply are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ITOCY currently has a forward P/E ratio of 7.59, while TSCO has a forward P/E of 24.98. We also note that ITOCY has a PEG ratio of 0.38. 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. TSCO currently has a PEG ratio of 2.58.

Another notable valuation metric for ITOCY is its P/B ratio of 1.25. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TSCO has a P/B of 11.48.

Based on these metrics and many more, ITOCY holds a Value grade of A, while TSCO has a Value grade of C.

Both ITOCY and TSCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ITOCY is the superior value option right now.


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