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DNUT vs. GO: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Krispy Kreme (DNUT - Free Report) and Grocery Outlet Holding Corp. (GO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Krispy Kreme has a Zacks Rank of #2 (Buy), while Grocery Outlet Holding Corp. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DNUT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
DNUT currently has a forward P/E ratio of 34.80, while GO has a forward P/E of 46.01. We also note that DNUT has a PEG ratio of 1.48. 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. GO currently has a PEG ratio of 4.40.
Another notable valuation metric for DNUT is its P/B ratio of 1.74. 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, GO has a P/B of 4.22.
These metrics, and several others, help DNUT earn a Value grade of B, while GO has been given a Value grade of C.
DNUT stands above GO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DNUT is the superior value option right now.
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DNUT vs. GO: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Krispy Kreme (DNUT - Free Report) and Grocery Outlet Holding Corp. (GO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Krispy Kreme has a Zacks Rank of #2 (Buy), while Grocery Outlet Holding Corp. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DNUT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
DNUT currently has a forward P/E ratio of 34.80, while GO has a forward P/E of 46.01. We also note that DNUT has a PEG ratio of 1.48. 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. GO currently has a PEG ratio of 4.40.
Another notable valuation metric for DNUT is its P/B ratio of 1.74. 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, GO has a P/B of 4.22.
These metrics, and several others, help DNUT earn a Value grade of B, while GO has been given a Value grade of C.
DNUT stands above GO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DNUT is the superior value option right now.