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ACI or KMB: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Albertsons Companies, Inc. (ACI - Free Report) or Kimberly-Clark (KMB - 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.

Right now, Albertsons Companies, Inc. is sporting a Zacks Rank of #2 (Buy), while Kimberly-Clark has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ACI has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

ACI currently has a forward P/E ratio of 6.78, while KMB has a forward P/E of 21.59. We also note that ACI has a PEG ratio of 1.26. 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. KMB currently has a PEG ratio of 4.21.

Another notable valuation metric for ACI is its P/B ratio of 2.48. 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, KMB has a P/B of 69.59.

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.


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