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ODP vs. FIVE: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either ODP Corp. (ODP - Free Report) or Five Below (FIVE - 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
ODP Corp. has a Zacks Rank of #2 (Buy), while Five Below has a Zacks Rank of #4 (Sell) right now. This means that ODP'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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ODP currently has a forward P/E ratio of 8.86, while FIVE has a forward P/E of 28.36. We also note that ODP has a PEG ratio of 0.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FIVE currently has a PEG ratio of 1.32.
Another notable valuation metric for ODP is its P/B ratio of 1.53. 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, FIVE has a P/B of 5.98.
These are just a few of the metrics contributing to ODP's Value grade of A and FIVE's Value grade of C.
ODP stands above FIVE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ODP is the superior value option right now.
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ODP vs. FIVE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either ODP Corp. (ODP - Free Report) or Five Below (FIVE - 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
ODP Corp. has a Zacks Rank of #2 (Buy), while Five Below has a Zacks Rank of #4 (Sell) right now. This means that ODP'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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ODP currently has a forward P/E ratio of 8.86, while FIVE has a forward P/E of 28.36. We also note that ODP has a PEG ratio of 0.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FIVE currently has a PEG ratio of 1.32.
Another notable valuation metric for ODP is its P/B ratio of 1.53. 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, FIVE has a P/B of 5.98.
These are just a few of the metrics contributing to ODP's Value grade of A and FIVE's Value grade of C.
ODP stands above FIVE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ODP is the superior value option right now.