Back to top

Image: Bigstock

ACI vs. KMB: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Albertsons Companies, Inc. (ACI - Free Report) and Kimberly-Clark (KMB - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Albertsons Companies, Inc. and Kimberly-Clark are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that ACI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ACI currently has a forward P/E ratio of 8.62, while KMB has a forward P/E of 19.55. We also note that ACI has a PEG ratio of 1.48. 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. KMB currently has a PEG ratio of 3.81.

Another notable valuation metric for ACI is its P/B ratio of 3.30. 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, KMB has a P/B of 50.13.

These metrics, and several others, help ACI earn a Value grade of A, while KMB has been given a Value grade of C.

ACI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ACI is likely the superior value option right now.


See More Zacks Research for These Tickers


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


Kimberly-Clark Corporation (KMB) - free report >>

Albertsons Companies, Inc. (ACI) - free report >>

Published in