Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Ingles (IMKTA - Free Report) or Walmart (WMT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, both Ingles and Walmart are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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 11.30, while WMT has a forward P/E of 23.99. We also note that IMKTA has a PEG ratio of 1.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WMT currently has a PEG ratio of 4.84.

Another notable valuation metric for IMKTA is its P/B ratio of 1.49. 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, WMT has a P/B of 4.34.

Based on these metrics and many more, IMKTA holds a Value grade of A, while WMT has 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Walmart Inc. (WMT) - free report >>

Ingles Markets, Incorporated (IMKTA) - free report >>

Published in