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SYY or LW: Which Is the Better Value Stock Right Now?

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Investors interested in Food - Miscellaneous stocks are likely familiar with Sysco (SYY - Free Report) and Lamb Weston (LW - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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 Sysco and Lamb Weston are sporting 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 only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SYY currently has a forward P/E ratio of 21.94, while LW has a forward P/E of 26.05. We also note that SYY has a PEG ratio of 2.34. 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. LW currently has a PEG ratio of 2.95.

Another notable valuation metric for SYY is its P/B ratio of 17.40. 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, LW has a P/B of 66.28.

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

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


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