Back to top

Image: Bigstock

ADRNY vs. NWL: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Ahold NV (ADRNY - Free Report) and Newell Brands (NWL - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Ahold NV and Newell Brands are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. Investors should feel comfortable knowing that ADRNY likely has seen a stronger improvement to its earnings outlook than NWL has recently. But this is just one piece of the puzzle 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.

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.

ADRNY currently has a forward P/E ratio of 13.03, while NWL has a forward P/E of 14.94. We also note that ADRNY has a PEG ratio of 2.55. 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. NWL currently has a PEG ratio of 8.64.

Another notable valuation metric for ADRNY is its P/B ratio of 1.85. 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, NWL has a P/B of 1.92.

Based on these metrics and many more, ADRNY holds a Value grade of A, while NWL has a Value grade of D.

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

In-Depth Zacks Research for the Tickers Above

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

Ahold NV (ADRNY) - free report >>

Newell Brands Inc. (NWL) - free report >>

Published in