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PFGC or SOVO: Which Is the Better Value Stock Right Now?

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Investors interested in Food - Natural Foods Products stocks are likely familiar with Performance Food Group (PFGC - Free Report) and Sovos Brands, Inc. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Performance Food Group and Sovos Brands, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PFGC has an improving earnings 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 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.

PFGC currently has a forward P/E ratio of 15.70, while SOVO has a forward P/E of 24.66. We also note that PFGC has a PEG ratio of 1.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SOVO currently has a PEG ratio of 24.66.

Another notable valuation metric for PFGC is its P/B ratio of 2.67. 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, SOVO has a P/B of 2.88.

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

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


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