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HELE or EL: Which Is the Better Value Stock Right Now?

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Investors interested in Cosmetics stocks are likely familiar with Helen of Troy (HELE - Free Report) and Estee Lauder (EL - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Helen of Troy and Estee Lauder are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

HELE currently has a forward P/E ratio of 16.42, while EL has a forward P/E of 35.09. We also note that HELE has a PEG ratio of 2.33. 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. EL currently has a PEG ratio of 2.71.

Another notable valuation metric for HELE is its P/B ratio of 3.53. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EL has a P/B of 14.34.

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

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


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The Estee Lauder Companies Inc. (EL) - free report >>

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