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ACI or KMB: Which Is the Better Value Stock Right Now?

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Investors interested in Consumer Products - Staples stocks are likely familiar with Albertsons Companies, Inc. (ACI - Free Report) and Kimberly-Clark (KMB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.

Currently, Albertsons Companies, Inc. has a Zacks Rank of #2 (Buy), while Kimberly-Clark has a Zacks Rank of #3 (Hold). This means that ACI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

ACI currently has a forward P/E ratio of 12.02, while KMB has a forward P/E of 21.77. We also note that ACI has a PEG ratio of 1.50. 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. KMB currently has a PEG ratio of 4.35.

Another notable valuation metric for ACI is its P/B ratio of 7.43. 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, KMB has a P/B of 68.16.

These are just a few of the metrics contributing to ACI's Value grade of A and KMB's Value grade of C.

ACI sticks out from KMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that ACI is the better option right now.


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