Investors interested in Retail - Miscellaneous stocks are likely familiar with Hibbett Sports (HIBB - Free Report) and Dick's Sporting Goods (DKS - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Hibbett Sports and Dick's Sporting Goods are both sporting a Zacks Rank of # 1 (Strong 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. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
HIBB currently has a forward P/E ratio of 11.27, while DKS has a forward P/E of 13.18. We also note that HIBB has a PEG ratio of 0.92. 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. DKS currently has a PEG ratio of 2.04.
Another notable valuation metric for HIBB is its P/B ratio of 1.42. 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, DKS has a P/B of 2.43.
These are just a few of the metrics contributing to HIBB's Value grade of A and DKS's Value grade of C.
Both HIBB and DKS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HIBB is the superior value option right now.