Advertisement
Australia markets closed

  • ALL ORDS

    7,842.20
    -95.30 (-1.20%)
     

  • ASX 200

    7,581.50
    -101.50 (-1.32%)
     

  • AUD/USD

    0.6543
    +0.0020 (+0.30%)
     

  • OIL

    84.03
    +0.46 (+0.55%)
     

  • GOLD

    2,350.50
    +8.00 (+0.34%)
     

  • Bitcoin AUD

    98,495.73
    +240.66 (+0.24%)
     

  • CMC Crypto 200

    1,392.03
    -4.50 (-0.32%)
     

  • AUD/EUR

    0.6096
    +0.0023 (+0.37%)
     

  • AUD/NZD

    1.0970
    +0.0012 (+0.11%)
     

  • NZX 50

    11,805.09
    -141.34 (-1.18%)
     

  • NASDAQ

    17,430.50
    -96.30 (-0.55%)
     

  • FTSE

    8,078.86
    +38.48 (+0.48%)
     

  • Dow Jones

    38,085.80
    -375.12 (-0.98%)
     

  • DAX

    17,917.28
    -171.42 (-0.95%)
     

  • Hang Seng

    17,704.80
    +420.26 (+2.43%)
     

  • NIKKEI 225

    37,934.76
    +306.28 (+0.81%)
     

KRYAY vs. LW: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2-min read

Investors interested in Food - Miscellaneous stocks are likely familiar with Kerry Group PLC (KRYAY) and Lamb Weston (LW). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Kerry Group PLC is sporting a Zacks Rank of #2 (Buy), while Lamb Weston has a Zacks Rank of #3 (Hold). This means that KRYAY'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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

ADVERTISEMENT

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.

KRYAY currently has a forward P/E ratio of 21.35, while LW has a forward P/E of 25.57. We also note that KRYAY has a PEG ratio of 1.68. 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. LW currently has a PEG ratio of 1.83.

Another notable valuation metric for KRYAY is its P/B ratio of 2.60. 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, LW has a P/B of 26.90.

These metrics, and several others, help KRYAY earn a Value grade of B, while LW has been given a Value grade of C.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Kerry Group PLC (KRYAY) : Free Stock Analysis Report
 
Lamb Weston (LW) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research