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LOW or HD: Which Is the Better Value Stock Right Now?
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Investors with an interest in Building Products - Retail stocks have likely encountered both Lowe's (LOW - Free Report) and Home Depot (HD - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Lowe's is sporting a Zacks Rank of #2 (Buy), while Home Depot has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that LOW likely has seen a stronger improvement to its earnings outlook than HD has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LOW currently has a forward P/E ratio of 18.06, while HD has a forward P/E of 20.76. We also note that LOW has a PEG ratio of 1.18. 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. HD currently has a PEG ratio of 1.50.
Another notable valuation metric for LOW is its P/B ratio of 14.20. 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, HD has a P/B of 134.22.
These are just a few of the metrics contributing to LOW's Value grade of A and HD's Value grade of C.
LOW stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LOW is the superior value option right now.
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LOW or HD: Which Is the Better Value Stock Right Now?
Investors with an interest in Building Products - Retail stocks have likely encountered both Lowe's (LOW - Free Report) and Home Depot (HD - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Lowe's is sporting a Zacks Rank of #2 (Buy), while Home Depot has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that LOW likely has seen a stronger improvement to its earnings outlook than HD has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LOW currently has a forward P/E ratio of 18.06, while HD has a forward P/E of 20.76. We also note that LOW has a PEG ratio of 1.18. 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. HD currently has a PEG ratio of 1.50.
Another notable valuation metric for LOW is its P/B ratio of 14.20. 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, HD has a P/B of 134.22.
These are just a few of the metrics contributing to LOW's Value grade of A and HD's Value grade of C.
LOW stands above HD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LOW is the superior value option right now.