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PVH vs. COLM: Which Stock Should Value Investors Buy Now?

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Investors interested in Textile - Apparel stocks are likely familiar with PVH (PVH - Free Report) and Columbia Sportswear (COLM - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, PVH has a Zacks Rank of #2 (Buy), while Columbia Sportswear has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that PVH likely has seen a stronger improvement to its earnings outlook than COLM has recently. However, value investors will care about much more than just this.

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.

PVH currently has a forward P/E ratio of 11.10, while COLM has a forward P/E of 21.51. We also note that PVH has a PEG ratio of 0.73. 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 3.25.

Another notable valuation metric for PVH is its P/B ratio of 1.55. 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 2.48.

These are just a few of the metrics contributing to PVH's Value grade of B and COLM's Value grade of D.

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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