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MCFT or POOL: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Leisure and Recreation Products sector have probably already heard of MasterCraft Boat Holdings, Inc. (MCFT - Free Report) and Pool Corp. (POOL - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
MasterCraft Boat Holdings, Inc. and Pool Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MCFT has an improving earnings outlook. 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.
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.
MCFT currently has a forward P/E ratio of 6.22, while POOL has a forward P/E of 32.34. We also note that MCFT has a PEG ratio of 0.62. 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. POOL currently has a PEG ratio of 1.38.
Another notable valuation metric for MCFT is its P/B ratio of 3.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, POOL has a P/B of 20.20.
These are just a few of the metrics contributing to MCFT's Value grade of A and POOL's Value grade of D.
MCFT stands above POOL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MCFT is the superior value option right now.