Investors interested in Textile - Apparel stocks are likely familiar with Delta Apparel (DLA - Free Report) and Gildan Activewear (GIL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Delta Apparel is sporting a Zacks Rank of #1 (Strong Buy), while Gildan Activewear has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DLA has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
DLA currently has a forward P/E ratio of 12.47, while GIL has a forward P/E of 14.76. We also note that DLA has a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GIL currently has a PEG ratio of 1.30.
Another notable valuation metric for DLA is its P/B ratio of 0.92. 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, GIL has a P/B of 3.
These are just a few of the metrics contributing to DLA's Value grade of A and GIL's Value grade of C.
DLA sticks out from GIL in both our Zacks Rank and Style Scores models, so value investors will likely feel that DLA is the better option right now.