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PVH vs. COLM: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Textile - Apparel stocks have likely encountered both PVH (PVH - Free Report) and Columbia Sportswear (COLM - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

PVH and Columbia Sportswear are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PVH has 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 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.

PVH currently has a forward P/E ratio of 8.24, while COLM has a forward P/E of 15.81. We also note that PVH has a PEG ratio of 0.78. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. COLM currently has a PEG ratio of 1.22.

Another notable valuation metric for PVH is its P/B ratio of 0.98. 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, COLM has a P/B of 2.79.

These metrics, and several others, help PVH earn a Value grade of B, while COLM has been given a Value grade of C.

PVH has seen stronger estimate revision activity and sports more attractive valuation metrics than COLM, so it seems like value investors will conclude that PVH is the superior option right now.


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