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CBD or WMT: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Virtu Financial (VIRT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Investors looking for stocks in the Retail - Supermarkets sector might want to consider either CBD (CBD) or Walmart (WMT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.

Currently, CBD has a Zacks Rank of #1 (Strong Buy), while Walmart has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that CBD 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 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.

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.

CBD currently has a forward P/E ratio of 19.76, while WMT has a forward P/E of 21.68. We also note that CBD has a PEG ratio of 1.34. 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. WMT currently has a PEG ratio of 4.74.

Another notable valuation metric for CBD is its P/B ratio of 1.71. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WMT has a P/B of 3.83.

Based on these metrics and many more, CBD holds a Value grade of A, while WMT has a Value grade of C.

CBD 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 CBD is likely the superior value option right now.


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Companhia Brasileira de Distribuicao (CBD) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
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