Investors with an interest in Retail - Supermarkets stocks have likely encountered both Ingles (IMKTA - Free Report) and CBD (CBD - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ingles has a Zacks Rank of #1 (Strong Buy), while CBD has a Zacks Rank of #4 (Sell) right now. This means that IMKTA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
IMKTA currently has a forward P/E ratio of 8.28, while CBD has a forward P/E of 21.26. We also note that IMKTA has a PEG ratio of 0.91. 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. CBD currently has a PEG ratio of 1.05.
Another notable valuation metric for IMKTA is its P/B ratio of 0.90. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CBD has a P/B of 1.58.
Based on these metrics and many more, IMKTA holds a Value grade of A, while CBD has a Value grade of C.
IMKTA 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 IMKTA is likely the superior value option right now.