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KR or WMMVY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Kroger (KR - Free Report) or 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Kroger has a Zacks Rank of #2 (Buy), while WalMart de Mexico SAB de CV has a Zacks Rank of #3 (Hold). This means that KR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

KR currently has a forward P/E ratio of 11.47, while WMMVY has a forward P/E of 27.54. We also note that KR has a PEG ratio of 0.98. 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. WMMVY currently has a PEG ratio of 3.17.

Another notable valuation metric for KR is its P/B ratio of 3.46. 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, WMMVY has a P/B of 7.99.

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

KR stands above WMMVY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KR is the superior value option right now.


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