Investors looking for stocks in the Textile - Apparel sector might want to consider either G-III Apparel Group (GIII - Free Report) or Gildan Activewear (GIL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 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.
G-III Apparel Group and Gildan Activewear are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that GIII's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
GIII currently has a forward P/E ratio of 12.17, while GIL has a forward P/E of 17.37. We also note that GIII has a PEG ratio of 0.81. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GIL currently has a PEG ratio of 1.46.
Another notable valuation metric for GIII is its P/B ratio of 1.49. 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, GIL has a P/B of 3.45.
These are just a few of the metrics contributing to GIII's Value grade of B and GIL's Value grade of C.
GIII has seen stronger estimate revision activity and sports more attractive valuation metrics than GIL, so it seems like value investors will conclude that GIII is the superior option right now.