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CRI vs. SHOO: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Carter's (CRI - Free Report) and Steven Madden (SHOO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Carter's and Steven Madden are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CRI currently has a forward P/E ratio of 13.56, while SHOO has a forward P/E of 19.06. We also note that CRI has a PEG ratio of 0.64. 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. SHOO currently has a PEG ratio of 1.27.

Another notable valuation metric for CRI is its P/B ratio of 3.97. 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, SHOO has a P/B of 4.14.

These are just a few of the metrics contributing to CRI's Value grade of A and SHOO's Value grade of C.

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


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