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FL or GOOS: Which Is the Better Value Stock Right Now?

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Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Foot Locker (FL - Free Report) and Canada Goose (GOOS - 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.

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 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.

Currently, Foot Locker has a Zacks Rank of #1 (Strong Buy), while Canada Goose has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FL likely has seen a stronger improvement to its earnings outlook than GOOS has recently. 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 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.

FL currently has a forward P/E ratio of 21.69, while GOOS has a forward P/E of 66.75. We also note that FL has a PEG ratio of 3.28. 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. GOOS currently has a PEG ratio of 7.85.

Another notable valuation metric for FL is its P/B ratio of 1.73. 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, GOOS has a P/B of 10.13.

These are just a few of the metrics contributing to FL's Value grade of A and GOOS's Value grade of F.

FL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FL is likely the superior value option right now.


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