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GES vs. VFC: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Textile - Apparel stocks have likely encountered both Guess (GES - Free Report) and V.F. (VFC - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Guess and V.F. are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that GES'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 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

GES currently has a forward P/E ratio of 20.43, while VFC has a forward P/E of 25.98. We also note that GES has a PEG ratio of 1.17. 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. VFC currently has a PEG ratio of 2.43.

Another notable valuation metric for GES is its P/B ratio of 1.98. 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, VFC has a P/B of 9.97.

Based on these metrics and many more, GES holds a Value grade of A, while VFC has a Value grade of D.

GES is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GES is likely the superior value option right now.


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