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SYY vs. LW: 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 Sysco (SYY) or Lamb Weston (LW - 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, both Sysco and Lamb Weston are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.

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.

SYY currently has a forward P/E ratio of 21.47, while LW has a forward P/E of 26.19. We also note that SYY has a PEG ratio of 2.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LW currently has a PEG ratio of 2.97.

Another notable valuation metric for SYY is its P/B ratio of 17.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LW has a P/B of 66.87.

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

Both SYY and LW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SYY is the superior value option right now.


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