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SCVL vs. VRA: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Shoe Carnival (SCVL - Free Report) and Vera Bradley (VRA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Shoe Carnival is sporting a Zacks Rank of #1 (Strong Buy), while Vera Bradley has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SCVL has an improving earnings outlook. But this is just one piece of the puzzle 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.

SCVL currently has a forward P/E ratio of 16.11, while VRA has a forward P/E of 29.35. We also note that SCVL has a PEG ratio of 1.34. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. VRA currently has a PEG ratio of 5.87.

Another notable valuation metric for SCVL is its P/B ratio of 1.75. 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, VRA has a P/B of 1.76.

These metrics, and several others, help SCVL earn a Value grade of B, while VRA has been given a Value grade of D.

SCVL has seen stronger estimate revision activity and sports more attractive valuation metrics than VRA, so it seems like value investors will conclude that SCVL is the superior option right now.


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Shoe Carnival, Inc. (SCVL) - free report >>

Vera Bradley, Inc. (VRA) - free report >>