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Ollie's Bargain Outlet Holdings, Inc. (OLLI) - free report >>
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Ollie's Bargain Outlet Holdings, Inc. (OLLI) - free report >>
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FRG vs. OLLI: Which Stock Is the Better Value Option?
Investors with an interest in Consumer Products - Staples stocks have likely encountered both Franchise Group and Ollie's Bargain Outlet (OLLI - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Franchise Group is sporting a Zacks Rank of #1 (Strong Buy), while Ollie's Bargain Outlet has a Zacks Rank of #4 (Sell). This means that FRG'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
FRG currently has a forward P/E ratio of 10.73, while OLLI has a forward P/E of 24.05. We also note that FRG has a PEG ratio of 0.72. 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. OLLI currently has a PEG ratio of 1.99.
Another notable valuation metric for FRG is its P/B ratio of 2.39. 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, OLLI has a P/B of 2.69.
These are just a few of the metrics contributing to FRG's Value grade of B and OLLI's Value grade of D.
FRG stands above OLLI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FRG is the superior value option right now.