Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both Spectrum Brands (SPB - Free Report) and UNICHARM CORP (UNICY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Spectrum Brands and UNICHARM CORP are both sporting a Zacks Rank of # 2 (Buy) right now. 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 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.
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.
SPB currently has a forward P/E ratio of 15.83, while UNICY has a forward P/E of 39.02. We also note that SPB has a PEG ratio of 1.19. 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. UNICY currently has a PEG ratio of 4.34.
Another notable valuation metric for SPB is its P/B ratio of 1.72. 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, UNICY has a P/B of 5.14.
These metrics, and several others, help SPB earn a Value grade of B, while UNICY has been given a Value grade of C.
Both SPB and UNICY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SPB is the superior value option right now.