DLTR or BURL: Which Is the Better Value Stock Right Now?

Investors with an interest in Retail - Discount Stores stocks have likely encountered both Dollar Tree (DLTR) and Burlington Stores (BURL). 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Dollar Tree is sporting a Zacks Rank of #2 (Buy), while Burlington Stores has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that DLTR likely has seen a stronger improvement to its earnings outlook than BURL 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.

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.

DLTR currently has a forward P/E ratio of 20.29, while BURL has a forward P/E of 22.50. We also note that DLTR has a PEG ratio of 1.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BURL currently has a PEG ratio of 2.62.

Another notable valuation metric for DLTR is its P/B ratio of 4.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BURL has a P/B of 13.02.

These are just a few of the metrics contributing to DLTR's Value grade of B and BURL's Value grade of D.

DLTR stands above BURL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DLTR is the superior value option right now.

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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
 
Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
 
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