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TSCDY vs. WMMVY: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Tesco PLC (TSCDY - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Tesco PLC is sporting a Zacks Rank of #1 (Strong Buy), while WalMart de Mexico SAB de CV has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that TSCDY likely has seen a stronger improvement to its earnings outlook than WMMVY has recently. But this is just one factor that value investors are interested in.

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.

TSCDY currently has a forward P/E ratio of 12.34, while WMMVY has a forward P/E of 30.18. We also note that TSCDY has a PEG ratio of 0.46. 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 3.55.

Another notable valuation metric for TSCDY is its P/B ratio of 1.59. 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, WMMVY has a P/B of 8.

Based on these metrics and many more, TSCDY holds a Value grade of A, while WMMVY has a Value grade of C.

TSCDY has seen stronger estimate revision activity and sports more attractive valuation metrics than WMMVY, so it seems like value investors will conclude that TSCDY is the superior option right now.


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