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TSCDY or WMT: 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 Tesco PLC (TSCDY - Free Report) or Walmart (WMT - 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 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.

Tesco PLC and Walmart are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that TSCDY'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 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.

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.

TSCDY currently has a forward P/E ratio of 11.80, while WMT has a forward P/E of 23.91. We also note that TSCDY has a PEG ratio of 2.69. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WMT currently has a PEG ratio of 4.35.

Another notable valuation metric for TSCDY is its P/B ratio of 1.36. 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, WMT has a P/B of 4.89.

These are just a few of the metrics contributing to TSCDY's Value grade of A and WMT's Value grade of C.

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


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