Back to top

Image: Bigstock

GIS vs. NSRGY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Food - Miscellaneous sector might want to consider either General Mills (GIS - Free Report) or Nestle SA (NSRGY - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, General Mills has a Zacks Rank of #2 (Buy), while Nestle SA has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GIS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

GIS currently has a forward P/E ratio of 18.81, while NSRGY has a forward P/E of 23.04. We also note that GIS has a PEG ratio of 2.51. 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. NSRGY currently has a PEG ratio of 2.81.

Another notable valuation metric for GIS is its P/B ratio of 4.17. 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, NSRGY has a P/B of 5.43.

Based on these metrics and many more, GIS holds a Value grade of B, while NSRGY has a Value grade of C.

GIS sticks out from NSRGY in both our Zacks Rank and Style Scores models, so value investors will likely feel that GIS is the better option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


General Mills, Inc. (GIS) - free report >>

Nestle SA (NSRGY) - free report >>

Published in