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Ralph Lauren Corporation (RL) - free report >>
LVMH-Moet Hennessy Louis Vuitton SA (LVMUY) - free report >>
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Ralph Lauren Corporation (RL) - free report >>
LVMH-Moet Hennessy Louis Vuitton SA (LVMUY) - free report >>
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RL vs. LVMUY: Which Stock Should Value Investors Buy Now?
Investors interested in Textile - Apparel stocks are likely familiar with Ralph Lauren (RL - Free Report) and LVMH-Moet Hennessy Louis Vuitton SA (LVMUY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Ralph Lauren and LVMH-Moet Hennessy Louis Vuitton SA are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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.
RL currently has a forward P/E ratio of 15.16, while LVMUY has a forward P/E of 24.93. We also note that RL has a PEG ratio of 1.61. 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. LVMUY currently has a PEG ratio of 1.77.
Another notable valuation metric for RL is its P/B ratio of 3.26. 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, LVMUY has a P/B of 7.66.
Based on these metrics and many more, RL holds a Value grade of B, while LVMUY has a Value grade of F.
Both RL and LVMUY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RL is the superior value option right now.