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KR vs. WMMVY: Which Stock Is the Better Value Option?

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Investors interested in Retail - Supermarkets stocks are likely familiar with Kroger (KR - Free Report) and WalMart de Mexico SAB de CV (WMMVY - 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.

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

Kroger has a Zacks Rank of #2 (Buy), while WalMart de Mexico SAB de CV has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that KR likely has seen a stronger improvement to its earnings outlook than WMMVY has recently. But this is just one piece of the puzzle for value investors.

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.

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.

KR currently has a forward P/E ratio of 10.38, while WMMVY has a forward P/E of 24.78. We also note that KR has a PEG ratio of 0.89. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WMMVY currently has a PEG ratio of 2.86.

Another notable valuation metric for KR is its P/B ratio of 3.13. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WMMVY has a P/B of 7.21.

These metrics, and several others, help KR earn a Value grade of A, while WMMVY has been given a Value grade of D.

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


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