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PVH vs. COLM: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Textile - Apparel sector might want to consider either PVH (PVH - Free Report) or Columbia Sportswear (COLM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, PVH has a Zacks Rank of #2 (Buy), while Columbia Sportswear has a Zacks Rank of #3 (Hold). This means that PVH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.

PVH currently has a forward P/E ratio of 9.31, while COLM has a forward P/E of 15.42. We also note that PVH has a PEG ratio of 0.91. 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. COLM currently has a PEG ratio of 1.82.

Another notable valuation metric for PVH is its P/B ratio of 1.04. 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, COLM has a P/B of 3.09.

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

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


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