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ROST or COST: Which Is the Better Value Stock Right Now?
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Investors with an interest in Retail - Discount Stores stocks have likely encountered both Ross Stores (ROST - Free Report) and Costco (COST - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ross Stores and Costco are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ROST likely has seen a stronger improvement to its earnings outlook than COST has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ROST currently has a forward P/E ratio of 22.94, while COST has a forward P/E of 38.81. We also note that ROST has a PEG ratio of 2.18. 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. COST currently has a PEG ratio of 4.41.
Another notable valuation metric for ROST is its P/B ratio of 9.05. 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, COST has a P/B of 10.50.
Based on these metrics and many more, ROST holds a Value grade of B, while COST has a Value grade of C.
ROST stands above COST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ROST is the superior value option right now.
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ROST or COST: Which Is the Better Value Stock Right Now?
Investors with an interest in Retail - Discount Stores stocks have likely encountered both Ross Stores (ROST - Free Report) and Costco (COST - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ross Stores and Costco are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ROST likely has seen a stronger improvement to its earnings outlook than COST has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ROST currently has a forward P/E ratio of 22.94, while COST has a forward P/E of 38.81. We also note that ROST has a PEG ratio of 2.18. 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. COST currently has a PEG ratio of 4.41.
Another notable valuation metric for ROST is its P/B ratio of 9.05. 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, COST has a P/B of 10.50.
Based on these metrics and many more, ROST holds a Value grade of B, while COST has a Value grade of C.
ROST stands above COST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ROST is the superior value option right now.