Back to top

Image: Bigstock

KR vs. WMMVY: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Kroger (KR - Free Report) and WalMart de Mexico SAB de CV (WMMVY - 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Kroger and WalMart de Mexico SAB de CV are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

KR currently has a forward P/E ratio of 13.35, while WMMVY has a forward P/E of 25.74. We also note that KR has a PEG ratio of 2.10. 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. WMMVY currently has a PEG ratio of 3.03.

Another notable valuation metric for KR is its P/B ratio of 3.18. 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, WMMVY has a P/B of 7.12.

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

Both KR and WMMVY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KR is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Kroger Co. (KR) - free report >>

Wal-Mart de Mexico SAB de CV (WMMVY) - free report >>

Published in