Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Boot Barn (BOOT - Free Report) and Canada Goose (GOOS - 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.
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.
Boot Barn and Canada Goose are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
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 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.
BOOT currently has a forward P/E ratio of 20.08, while GOOS has a forward P/E of 41.91. We also note that BOOT has a PEG ratio of 0.97. 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. GOOS currently has a PEG ratio of 1.34.
Another notable valuation metric for BOOT is its P/B ratio of 3.38. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GOOS has a P/B of 19.88.
These metrics, and several others, help BOOT earn a Value grade of A, while GOOS has been given a Value grade of D.
Both BOOT and GOOS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BOOT is the superior value option right now.