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GES vs. GIL: Which Stock Should Value Investors Buy Now?

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Investors interested in Textile - Apparel stocks are likely familiar with Guess (GES - Free Report) and 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Guess is sporting a Zacks Rank of #1 (Strong Buy), while Gildan Activewear has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GES likely has seen a stronger improvement to its earnings outlook than GIL has recently. 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.

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.

GES currently has a forward P/E ratio of 12.87, while GIL has a forward P/E of 17.64. We also note that GES has a PEG ratio of 0.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GIL currently has a PEG ratio of 1.20.

Another notable valuation metric for GES is its P/B ratio of 2.16. 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 3.78.

These are just a few of the metrics contributing to GES's Value grade of A and GIL's Value grade of C.

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


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Guess?, Inc. (GES) - free report >>

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