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ROST vs. COST: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Retail - Discount Stores sector might want to consider either Ross Stores (ROST - Free Report) or Costco (COST - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Ross Stores and Costco are sporting a Zacks Rank of # 2 (Buy). 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 just one piece of the puzzle 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.
ROST currently has a forward P/E ratio of 22.92, while COST has a forward P/E of 36.84. We also note that ROST has a PEG ratio of 1.96. 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. COST currently has a PEG ratio of 4.31.
Another notable valuation metric for ROST is its P/B ratio of 9.19. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, COST has a P/B of 10.23.
These metrics, and several others, help ROST earn a Value grade of B, while COST has been given a Value grade of C.
Both ROST and COST are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ROST is the superior value option right now.
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ROST vs. COST: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Retail - Discount Stores sector might want to consider either Ross Stores (ROST - Free Report) or Costco (COST - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Ross Stores and Costco are sporting a Zacks Rank of # 2 (Buy). 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 just one piece of the puzzle 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.
ROST currently has a forward P/E ratio of 22.92, while COST has a forward P/E of 36.84. We also note that ROST has a PEG ratio of 1.96. 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. COST currently has a PEG ratio of 4.31.
Another notable valuation metric for ROST is its P/B ratio of 9.19. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, COST has a P/B of 10.23.
These metrics, and several others, help ROST earn a Value grade of B, while COST has been given a Value grade of C.
Both ROST and COST are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ROST is the superior value option right now.