Investors interested in Leisure and Recreation Products stocks are likely familiar with Brunswick (BC) and Pool Corp. (POOL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Brunswick has a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BC currently has a forward P/E ratio of 11.96, while POOL has a forward P/E of 33.02. We also note that BC has a PEG ratio of 1.20. 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. POOL currently has a PEG ratio of 1.40.
Another notable valuation metric for BC is its P/B ratio of 3.94. 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, POOL has a P/B of 21.63.
These metrics, and several others, help BC earn a Value grade of B, while POOL has been given a Value grade of D.
BC 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 BC is likely the superior value option right now.
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Brunswick Corporation (BC) : Free Stock Analysis Report
Pool Corporation (POOL) : Free Stock Analysis Report
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