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DKS or FIVE: Which Is the Better Value Stock Right Now?

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Investors interested in Retail - Miscellaneous stocks are likely familiar with Dick's Sporting Goods (DKS - Free Report) and Five Below (FIVE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Dick's Sporting Goods is sporting a Zacks Rank of #1 (Strong Buy), while Five Below has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DKS has an improving earnings 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 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.

DKS currently has a forward P/E ratio of 10.18, while FIVE has a forward P/E of 84.79. We also note that DKS has a PEG ratio of 1.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FIVE currently has a PEG ratio of 4.29.

Another notable valuation metric for DKS is its P/B ratio of 2.50. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FIVE has a P/B of 12.17.

These are just a few of the metrics contributing to DKS's Value grade of A and FIVE's Value grade of D.

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


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DICK'S Sporting Goods, Inc. (DKS) - free report >>

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