Yahoo Finance GIL vs. KTB: Which Stock Is the Better Value Option?
Investors with an interest in Textile - Apparel stocks have likely encountered both Gildan Activewear (GIL) and Kontoor Brands (KTB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Gildan Activewear is sporting a Zacks Rank of #2 (Buy), while Kontoor Brands has a Zacks Rank of #5 (Strong Sell). This means that GIL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
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.
GIL currently has a forward P/E ratio of 11.94, while KTB has a forward P/E of 13.14. We also note that GIL has a PEG ratio of 1.33. 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. KTB currently has a PEG ratio of 1.64.
Another notable valuation metric for GIL is its P/B ratio of 3.05. 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, KTB has a P/B of 9.34.
These are just a few of the metrics contributing to GIL's Value grade of B and KTB's Value grade of C.
GIL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GIL is likely the superior value option right now.
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Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report
