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DKS or TSCO: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Dick's Sporting Goods (DKS - Free Report) or Tractor Supply (TSCO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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, both Dick's Sporting Goods and Tractor Supply are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

DKS currently has a forward P/E ratio of 10.06, while TSCO has a forward P/E of 20.05. We also note that DKS has a PEG ratio of 1.62. 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. TSCO currently has a PEG ratio of 1.64.

Another notable valuation metric for DKS is its P/B ratio of 1.67. 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, TSCO has a P/B of 7.02.

Based on these metrics and many more, DKS holds a Value grade of B, while TSCO has a Value grade of C.

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


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Tractor Supply Company (TSCO) - free report >>

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