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KR vs. WMT: Which Stock Should Value Investors Buy Now?

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Investors interested in Retail - Supermarkets stocks are likely familiar with Kroger (KR - Free Report) and Walmart (WMT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Kroger and Walmart 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 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.

KR currently has a forward P/E ratio of 10.51, while WMT has a forward P/E of 26.16. We also note that KR has a PEG ratio of 1.70. 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. WMT currently has a PEG ratio of 4.64.

Another notable valuation metric for KR is its P/B ratio of 2.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WMT has a P/B of 4.88.

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

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


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