Back to top

Image: Bigstock

TSCDY vs. WMMVY: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors with an interest in Retail - Supermarkets stocks have likely encountered both Tesco PLC (TSCDY - Free Report) and Wal-Mart de Mexico SAB de CV (WMMVY - 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.

Currently, both Tesco PLC and Wal-Mart de Mexico SAB de CV are holding a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

TSCDY currently has a forward P/E ratio of 11.73, while WMMVY has a forward P/E of 20.56. We also note that TSCDY has a PEG ratio of 0.45. 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. WMMVY currently has a PEG ratio of 2.51.

Another notable valuation metric for TSCDY is its P/B ratio of 1.73. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WMMVY has a P/B of 6.82.

These metrics, and several others, help TSCDY earn a Value grade of A, while WMMVY has been given a Value grade of D.

Both TSCDY and WMMVY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TSCDY is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Tesco PLC (TSCDY) - free report >>

Wal-Mart de Mexico SAB de CV (WMMVY) - free report >>

Published in