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CRI vs. SHOO: Which Stock Is the Better Value Option?

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Investors interested in Shoes and Retail Apparel stocks are likely familiar with Carter's (CRI - Free Report) and Steven Madden (SHOO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Currently, both Carter's and Steven Madden are holding 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 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CRI currently has a forward P/E ratio of 13.23, while SHOO has a forward P/E of 19.42. We also note that CRI has a PEG ratio of 0.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHOO currently has a PEG ratio of 1.29.

Another notable valuation metric for CRI is its P/B ratio of 4.02. 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, SHOO has a P/B of 4.64.

These metrics, and several others, help CRI earn a Value grade of B, while SHOO has been given a 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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