Yahoo Finance ACI vs. RH: Which Stock Is the Better Value Option?
Investors interested in Consumer Products - Staples stocks are likely familiar with Albertsons Companies, Inc. (ACI) and RH (RH). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Currently, Albertsons Companies, Inc. has a Zacks Rank of #2 (Buy), while RH has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that ACI likely has seen a stronger improvement to its earnings outlook than RH has recently. But this is just one piece of the puzzle for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ACI currently has a forward P/E ratio of 6.66, while RH has a forward P/E of 19.91. We also note that ACI has a PEG ratio of 1.24. 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. RH currently has a PEG ratio of 2.
Another notable valuation metric for ACI is its P/B ratio of 6.86. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RH has a P/B of 7.19.
These are just a few of the metrics contributing to ACI's Value grade of A and RH's Value grade of D.
ACI stands above RH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ACI is the superior value option right now.
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Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
RH (RH) : Free Stock Analysis Report
