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NOMD vs. POST: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Nomad Foods (NOMD - Free Report) or Post Holdings (POST - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Currently, Nomad Foods has a Zacks Rank of #2 (Buy), while Post Holdings has a Zacks Rank of #3 (Hold). This means that NOMD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

NOMD currently has a forward P/E ratio of 14.81, while POST has a forward P/E of 21.27. We also note that NOMD has a PEG ratio of 1.65. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. POST currently has a PEG ratio of 3.04.

Another notable valuation metric for NOMD is its P/B ratio of 1.47. 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, POST has a P/B of 2.71.

These are just a few of the metrics contributing to NOMD's Value grade of B and POST's Value grade of C.

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


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