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ODP vs. TSCO: Which Stock Is the Better Value Option?

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Investors with an interest in Retail - Miscellaneous stocks have likely encountered both ODP Corp. (ODP - Free Report) and Tractor Supply (TSCO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

ODP Corp. and Tractor Supply are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that ODP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

ODP currently has a forward P/E ratio of 5.57, while TSCO has a forward P/E of 19.75. We also note that ODP has a PEG ratio of 0.81. 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. TSCO currently has a PEG ratio of 1.52.

Another notable valuation metric for ODP is its P/B ratio of 0.74. 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, TSCO has a P/B of 8.20.

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

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


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