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PPC vs. HRL: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Food - Meat Products stocks have likely encountered both Pilgrim's Pride (PPC - Free Report) and Hormel Foods (HRL - 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 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.

Right now, Pilgrim's Pride is sporting a Zacks Rank of #2 (Buy), while Hormel Foods has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PPC likely has seen a stronger improvement to its earnings outlook than HRL has recently. But this is just one piece of the puzzle 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

PPC currently has a forward P/E ratio of 12.06, while HRL has a forward P/E of 28.49. We also note that PPC has a PEG ratio of 0.45. 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. HRL currently has a PEG ratio of 4.67.

Another notable valuation metric for PPC is its P/B ratio of 2.21. 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, HRL has a P/B of 3.98.

These metrics, and several others, help PPC earn a Value grade of A, while HRL has been given a Value grade of C.

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


In-Depth Zacks Research for the Tickers Above


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Pilgrims Pride Corporation (PPC) - free report >>

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