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IMKTA or WMT: Which Is the Better Value Stock Right Now?

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Investors with an interest in Retail - Supermarkets stocks have likely encountered both Ingles (IMKTA - Free Report) and Walmart Inc. (WMT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Ingles and Walmart Inc. are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

IMKTA currently has a forward P/E ratio of 10.11, while WMT has a forward P/E of 23.13. We also note that IMKTA has a PEG ratio of 0.99. 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. WMT currently has a PEG ratio of 4.67.

Another notable valuation metric for IMKTA is its P/B ratio of 1.33. 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, WMT has a P/B of 4.18.

Based on these metrics and many more, IMKTA holds a Value grade of A, while WMT has a Value grade of C.

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


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