ADRNY vs. KMB: Which Stock Should Value Investors Buy Now?

KMB ADRNY

Investors interested in Consumer Products - Staples stocks are likely familiar with Ahold NV (ADRNY - Free Report) and Kimberly-Clark (KMB - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Ahold NV and Kimberly-Clark are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ADRNY is likely seeing its earnings outlook improve to a greater extent. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ADRNY currently has a forward P/E ratio of 11.58, while KMB has a forward P/E of 22.02. We also note that ADRNY has a PEG ratio of 2.44. 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. KMB currently has a PEG ratio of 3.14.

Another notable valuation metric for ADRNY is its P/B ratio of 1.95. 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, KMB has a P/B of 53.42.

These are just a few of the metrics contributing to ADRNY's Value grade of A and KMB's Value grade of C.

ADRNY sticks out from KMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that ADRNY is the better option right now.

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