DBI or GOOS: Which Is the Better Value Stock Right Now?
Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Designer Brands (DBI) and Canada Goose (GOOS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Designer Brands has a Zacks Rank of #2 (Buy), while Canada Goose has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DBI 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 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.
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.
DBI currently has a forward P/E ratio of 9.50, while GOOS has a forward P/E of 35.60. We also note that DBI has a PEG ratio of 0.63. 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. GOOS currently has a PEG ratio of 1.25.
Another notable valuation metric for DBI is its P/B ratio of 1.87. 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, GOOS has a P/B of 16.22.
These are just a few of the metrics contributing to DBI's Value grade of A and GOOS's Value grade of D.
DBI stands above GOOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DBI is the superior value option right now.
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DSW Inc. (DBI) : Free Stock Analysis Report
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
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