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ITOCY or TSCO: Which Is the Better Value Stock Right Now?

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Investors interested in Retail - Miscellaneous stocks are likely familiar with Itochu Corp. (ITOCY - Free Report) and Tractor Supply (TSCO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.

Itochu Corp. and Tractor Supply are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture 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.

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 7.03, while TSCO has a forward P/E of 26.01. We also note that ITOCY has a PEG ratio of 0.35. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSCO currently has a PEG ratio of 2.69.

Another notable valuation metric for ITOCY is its P/B ratio of 1.29. 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 11.95.

These are just a few of the metrics contributing to ITOCY's Value grade of A and TSCO's 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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