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KR or WMMVY: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Kroger (KR - Free Report) and Wal-Mart de Mexico SAB de CV (WMMVY - 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.

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, Kroger is sporting a Zacks Rank of #2 (Buy), while Wal-Mart de Mexico SAB de CV has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that KR likely has seen a stronger improvement to its earnings outlook than WMMVY has recently. However, value investors will care about much more than just this.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

KR currently has a forward P/E ratio of 9.85, while WMMVY has a forward P/E of 24.42. We also note that KR has a PEG ratio of 2.09. 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. WMMVY currently has a PEG ratio of 2.98.

Another notable valuation metric for KR is its P/B ratio of 3.01. 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, WMMVY has a P/B of 6.91.

These are just a few of the metrics contributing to KR's Value grade of A and WMMVY's Value grade of C.

KR stands above WMMVY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KR is the superior value option right now.


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