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AEO vs. BURBY: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of American Eagle Outfitters (AEO - Free Report) and Burberry Group PLC (BURBY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 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.
Currently, American Eagle Outfitters has a Zacks Rank of #1 (Strong Buy), while Burberry Group PLC has a Zacks Rank of #3 (Hold). This means that AEO'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 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.
AEO currently has a forward P/E ratio of 13.95, while BURBY has a forward P/E of 20.47. We also note that AEO has a PEG ratio of 1.21. 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. BURBY currently has a PEG ratio of 1.72.
Another notable valuation metric for AEO is its P/B ratio of 1.99. 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, BURBY has a P/B of 5.31.
These are just a few of the metrics contributing to AEO's Value grade of B and BURBY's Value grade of C.
AEO stands above BURBY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEO is the superior value option right now.
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AEO vs. BURBY: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of American Eagle Outfitters (AEO - Free Report) and Burberry Group PLC (BURBY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 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.
Currently, American Eagle Outfitters has a Zacks Rank of #1 (Strong Buy), while Burberry Group PLC has a Zacks Rank of #3 (Hold). This means that AEO'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 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.
AEO currently has a forward P/E ratio of 13.95, while BURBY has a forward P/E of 20.47. We also note that AEO has a PEG ratio of 1.21. 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. BURBY currently has a PEG ratio of 1.72.
Another notable valuation metric for AEO is its P/B ratio of 1.99. 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, BURBY has a P/B of 5.31.
These are just a few of the metrics contributing to AEO's Value grade of B and BURBY's Value grade of C.
AEO stands above BURBY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEO is the superior value option right now.