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PPC vs. HRL: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Food - Meat Products sector have probably already heard of Pilgrim's Pride (PPC - Free Report) and Hormel Foods (HRL - Free Report) . 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, Pilgrim's Pride is sporting a Zacks Rank of #2 (Buy), while Hormel Foods has a Zacks Rank of #3 (Hold). This means that PPC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PPC currently has a forward P/E ratio of 18.73, while HRL has a forward P/E of 23.42. We also note that PPC has a PEG ratio of 3.16. 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. HRL currently has a PEG ratio of 4.01.
Another notable valuation metric for PPC is its P/B ratio of 1.82. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HRL has a P/B of 2.91.
These are just a few of the metrics contributing to PPC's Value grade of A and HRL's Value grade of C.
PPC stands above HRL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PPC is the superior value option right now.
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PPC vs. HRL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Food - Meat Products sector have probably already heard of Pilgrim's Pride (PPC - Free Report) and Hormel Foods (HRL - Free Report) . 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, Pilgrim's Pride is sporting a Zacks Rank of #2 (Buy), while Hormel Foods has a Zacks Rank of #3 (Hold). This means that PPC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PPC currently has a forward P/E ratio of 18.73, while HRL has a forward P/E of 23.42. We also note that PPC has a PEG ratio of 3.16. 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. HRL currently has a PEG ratio of 4.01.
Another notable valuation metric for PPC is its P/B ratio of 1.82. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HRL has a P/B of 2.91.
These are just a few of the metrics contributing to PPC's Value grade of A and HRL's Value grade of C.
PPC stands above HRL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PPC is the superior value option right now.