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GES vs. VFC: Which Stock Is the Better Value Option?
Investors looking for stocks in the Textile - Apparel sector might want to consider either Guess (GES - Free Report) or V.F. (VFC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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.
Guess has a Zacks Rank of #2 (Buy), while V.F. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that GES likely has seen a stronger improvement to its earnings outlook than VFC has recently. But this is just one piece of the puzzle for value investors.
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.
GES currently has a forward P/E ratio of 23.64, while VFC has a forward P/E of 25.27. We also note that GES has a PEG ratio of 1.35. 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. VFC currently has a PEG ratio of 2.36.
Another notable valuation metric for GES is its P/B ratio of 2.30. 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, VFC has a P/B of 9.69.
These metrics, and several others, help GES earn a Value grade of A, while VFC has been given a Value grade of D.
GES 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 GES is likely the superior value option right now.