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CROX vs. CTAS: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Textile - Apparel sector might want to consider either Crocs (CROX - Free Report) or Cintas (CTAS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.

Crocs has a Zacks Rank of #2 (Buy), while Cintas has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CROX likely has seen a stronger improvement to its earnings outlook than CTAS has recently. But this is only part of the picture 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.

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.

CROX currently has a forward P/E ratio of 8.60, while CTAS has a forward P/E of 38.35. We also note that CROX has a PEG ratio of 1.00. 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. CTAS currently has a PEG ratio of 3.36.

Another notable valuation metric for CROX is its P/B ratio of 4.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CTAS has a P/B of 16.34.

These metrics, and several others, help CROX earn a Value grade of B, while CTAS has been given a Value grade of F.

CROX 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 CROX is likely the superior value option right now.

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