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PVH or COLM: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Textile - Apparel sector might want to consider either PVH (PVH - Free Report) or 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.

Right now, PVH is sporting a Zacks Rank of #2 (Buy), while Columbia Sportswear has a Zacks Rank of #3 (Hold). This means that PVH'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 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 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.

PVH currently has a forward P/E ratio of 7.22, while COLM has a forward P/E of 16.62. We also note that PVH has a PEG ratio of 0.54. 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. COLM currently has a PEG ratio of 1.58.

Another notable valuation metric for PVH is its P/B ratio of 0.90. 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 2.46.

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

PVH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PVH is likely the superior value option right now.


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