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SFM vs. SOVO: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Food - Natural Foods Products sector have probably already heard of Sprouts Farmers (SFM - Free Report) and Sovos Brands, Inc. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Sprouts Farmers is sporting a Zacks Rank of #2 (Buy), while Sovos Brands, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SFM is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
SFM currently has a forward P/E ratio of 13.15, while SOVO has a forward P/E of 29.06. We also note that SFM has a PEG ratio of 1.38. 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. SOVO currently has a PEG ratio of 2.89.
Another notable valuation metric for SFM is its P/B ratio of 3.35. 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, SOVO has a P/B of 3.69.
Based on these metrics and many more, SFM holds a Value grade of A, while SOVO has a Value grade of D.
SFM sticks out from SOVO in both our Zacks Rank and Style Scores models, so value investors will likely feel that SFM is the better option right now.
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SFM vs. SOVO: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Food - Natural Foods Products sector have probably already heard of Sprouts Farmers (SFM - Free Report) and Sovos Brands, Inc. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Sprouts Farmers is sporting a Zacks Rank of #2 (Buy), while Sovos Brands, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SFM is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
SFM currently has a forward P/E ratio of 13.15, while SOVO has a forward P/E of 29.06. We also note that SFM has a PEG ratio of 1.38. 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. SOVO currently has a PEG ratio of 2.89.
Another notable valuation metric for SFM is its P/B ratio of 3.35. 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, SOVO has a P/B of 3.69.
Based on these metrics and many more, SFM holds a Value grade of A, while SOVO has a Value grade of D.
SFM sticks out from SOVO in both our Zacks Rank and Style Scores models, so value investors will likely feel that SFM is the better option right now.