EYE or CL: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Consumer Products - Staples sector might want to consider either National Vision (EYE) or Colgate-Palmolive (CL). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
National Vision has a Zacks Rank of #2 (Buy), while Colgate-Palmolive has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EYE likely has seen a stronger improvement to its earnings outlook than CL has recently. However, value investors will care about much more than just this.
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 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.
EYE currently has a forward P/E ratio of 16.91, while CL has a forward P/E of 22.23. We also note that EYE has a PEG ratio of 0.87. 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. CL currently has a PEG ratio of 4.01.
Another notable valuation metric for EYE is its P/B ratio of 1.48. 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, CL has a P/B of 121.21.
These are just a few of the metrics contributing to EYE's Value grade of B and CL's Value grade of D.
EYE has seen stronger estimate revision activity and sports more attractive valuation metrics than CL, so it seems like value investors will conclude that EYE is the superior option right now.
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See Stocks Now >>National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
