U.S. Markets closed
  • S&P Futures

    3,628.50
    -8.00 (-0.22%)
     
  • Dow Futures

    29,759.00
    -115.00 (-0.38%)
     
  • Nasdaq Futures

    12,277.50
    +20.00 (+0.16%)
     
  • Russell 2000 Futures

    1,844.70
    -8.30 (-0.45%)
     
  • Crude Oil

    45.08
    -0.45 (-0.99%)
     
  • Gold

    1,770.00
    -11.90 (-0.67%)
     
  • Silver

    22.19
    -0.44 (-1.96%)
     
  • EUR/USD

    1.1972
    +0.0001 (+0.0120%)
     
  • 10-Yr Bond

    0.8420
    -0.0360 (-4.10%)
     
  • Vix

    20.84
    -0.41 (-1.93%)
     
  • GBP/USD

    1.3336
    +0.0021 (+0.1614%)
     
  • USD/JPY

    103.9300
    -0.1550 (-0.1489%)
     
  • BTC-USD

    18,462.89
    +111.45 (+0.61%)
     
  • CMC Crypto 200

    364.36
    +26.86 (+7.96%)
     
  • FTSE 100

    6,367.58
    +4.65 (+0.07%)
     
  • Nikkei 225

    26,666.91
    +22.20 (+0.08%)
     

CPB or MKC: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Food - Miscellaneous sector have probably already heard of Campbell Soup (CPB) and McCormick (MKC). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Campbell Soup and McCormick are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

CPB currently has a forward P/E ratio of 18.60, while MKC has a forward P/E of 35.65. We also note that CPB has a PEG ratio of 2.25. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MKC currently has a PEG ratio of 6.17.

Another notable valuation metric for CPB is its P/B ratio of 6.24. 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, MKC has a P/B of 7.47.

These are just a few of the metrics contributing to CPB's Value grade of B and MKC's Value grade of D.

Both CPB and MKC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CPB 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
 
Campbell Soup Company (CPB) : Free Stock Analysis Report
 
McCormick Company, Incorporated (MKC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.