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UNFI vs. SYY: Which Stock Is the Better Value Option?

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Investors interested in Food - Miscellaneous stocks are likely familiar with United Natural Foods (UNFI - Free Report) and Sysco (SYY - 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 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.

United Natural Foods and Sysco are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that UNFI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

UNFI currently has a forward P/E ratio of 6.35, while SYY has a forward P/E of 19.07. We also note that UNFI has a PEG ratio of 0.88. 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. SYY currently has a PEG ratio of 1.84.

Another notable valuation metric for UNFI is its P/B ratio of 0.60. 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, SYY has a P/B of 12.78.

These metrics, and several others, help UNFI earn a Value grade of A, while SYY has been given a Value grade of C.

UNFI has seen stronger estimate revision activity and sports more attractive valuation metrics than SYY, so it seems like value investors will conclude that UNFI is the superior option right now.


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