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

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Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Kroger (KR - Free Report) or 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 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.

Currently, both Kroger and WalMart de Mexico SAB de CV are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

KR currently has a forward P/E ratio of 11.86, while WMMVY has a forward P/E of 23.66. We also note that KR has a PEG ratio of 1.04. 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 2.36.

Another notable valuation metric for KR is its P/B ratio of 3.55. 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 6.33.

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

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.


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

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