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GCO vs. GOOS: 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 Genesco (GCO - Free Report) and Canada Goose (GOOS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Genesco and Canada Goose are sporting 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 both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

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.

GCO currently has a forward P/E ratio of 14.57, while GOOS has a forward P/E of 68.78. We also note that GCO has a PEG ratio of 1.94. 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. GOOS currently has a PEG ratio of 2.62.

Another notable valuation metric for GCO is its P/B ratio of 1.14. 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, GOOS has a P/B of 37.06.

These are just a few of the metrics contributing to GCO's Value grade of B and GOOS's Value grade of F.

Both GCO and GOOS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GCO is the superior value option right now.


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Genesco Inc. (GCO) - free report >>

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