Investors interested in Food - Miscellaneous stocks are likely familiar with United Natural Foods (UNFI - Free Report) and Post Holdings (POST - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
United Natural Foods has a Zacks Rank of #2 (Buy), while Post Holdings has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that UNFI has an improving earnings outlook. But this is only part of the picture for value investors.
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.
UNFI currently has a forward P/E ratio of 9.67, while POST has a forward P/E of 23.26. We also note that UNFI has a PEG ratio of 1.21. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. POST currently has a PEG ratio of 1.66.
Another notable valuation metric for UNFI is its P/B ratio of 0.95. 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, POST has a P/B of 2.14.
Based on these metrics and many more, UNFI holds a Value grade of A, while POST has a Value grade of C.
UNFI sticks out from POST in both our Zacks Rank and Style Scores models, so value investors will likely feel that UNFI is the better option right now.