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SP vs. MNRO: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Consumer Services - Miscellaneous sector might want to consider either SP Plus (SP) or Monro Muffler Brake (MNRO - 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.

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.

Right now, SP Plus is sporting a Zacks Rank of #1 (Strong Buy), while Monro Muffler Brake has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SP 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SP currently has a forward P/E ratio of 15.74, while MNRO has a forward P/E of 31.28. We also note that SP has a PEG ratio of 1.57. 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. MNRO currently has a PEG ratio of 2.41.

Another notable valuation metric for SP is its P/B ratio of 2.66. 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, MNRO has a P/B of 3.51.

These metrics, and several others, help SP earn a Value grade of B, while MNRO has been given a Value grade of D.

SP 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 SP is likely the superior value option right now.


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