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TPX or RH: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Retail - Home Furnishings sector have probably already heard of Tempur Sealy (TPX - Free Report) and Restoration Hardware (RH - 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.
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.
Tempur Sealy and Restoration Hardware are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TPX has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
TPX currently has a forward P/E ratio of 16.36, while RH has a forward P/E of 25.58. We also note that TPX has a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RH currently has a PEG ratio of 0.94.
Another notable valuation metric for TPX is its P/B ratio of 13.30. 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, RH has a P/B of 32.33.
These are just a few of the metrics contributing to TPX's Value grade of B and RH's Value grade of C.
TPX has seen stronger estimate revision activity and sports more attractive valuation metrics than RH, so it seems like value investors will conclude that TPX is the superior option right now.
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TPX or RH: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Home Furnishings sector have probably already heard of Tempur Sealy (TPX - Free Report) and Restoration Hardware (RH - 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.
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.
Tempur Sealy and Restoration Hardware are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TPX has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
TPX currently has a forward P/E ratio of 16.36, while RH has a forward P/E of 25.58. We also note that TPX has a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RH currently has a PEG ratio of 0.94.
Another notable valuation metric for TPX is its P/B ratio of 13.30. 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, RH has a P/B of 32.33.
These are just a few of the metrics contributing to TPX's Value grade of B and RH's Value grade of C.
TPX has seen stronger estimate revision activity and sports more attractive valuation metrics than RH, so it seems like value investors will conclude that TPX is the superior option right now.