Yahoo Finance KR vs. WMT: Which Stock Is the Better Value Option?
Investors with an interest in Retail - Supermarkets stocks have likely encountered both Kroger (KR) and Walmart (WMT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 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.
Kroger and Walmart are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that KR likely has seen a stronger improvement to its earnings outlook than WMT has recently. But this is just one factor that value investors are interested in.
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.
KR currently has a forward P/E ratio of 12.67, while WMT has a forward P/E of 25.42. We also note that KR has a PEG ratio of 2.62. 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. WMT currently has a PEG ratio of 3.91.
Another notable valuation metric for KR is its P/B ratio of 3.48. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WMT has a P/B of 5.35.
These are just a few of the metrics contributing to KR's Value grade of A and WMT's Value grade of C.
KR 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 KR is likely the superior value option right now.
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The Kroger Co. (KR) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
