Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Albertsons Companies, Inc. (ACI) or Clorox (CLX). 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 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.
Right now, both Albertsons Companies, Inc. and Clorox are sporting 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ACI currently has a forward P/E ratio of 8.63, while CLX has a forward P/E of 23.50. We also note that ACI has a PEG ratio of 1.08. 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. CLX currently has a PEG ratio of 2.97.
Another notable valuation metric for ACI is its P/B ratio of 3.76. 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, CLX has a P/B of 89.20.
These are just a few of the metrics contributing to ACI's Value grade of A and CLX's Value grade of C.
Both ACI and CLX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ACI is the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpAlbertsons Companies, Inc. (ACI) : Free Stock Analysis Report
The Clorox Company (CLX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
