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IMKTA vs. WMT: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Retail - Supermarkets stocks have likely encountered both Ingles (IMKTA - Free Report) and Walmart (WMT - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Ingles and Walmart have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

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.

IMKTA currently has a forward P/E ratio of 8.79, while WMT has a forward P/E of 21.66. We also note that IMKTA has a PEG ratio of 1.10. 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. WMT currently has a PEG ratio of 4.58.

Another notable valuation metric for IMKTA is its P/B ratio of 0.97. 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, WMT has a P/B of 4.

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

Both IMKTA and WMT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IMKTA is the superior value option right now.


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