Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Dick's Sporting Goods (DKS) or Regis (RGS). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Dick's Sporting Goods is sporting a Zacks Rank of #2 (Buy), while Regis has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DKS has an improving earnings outlook. However, value investors will care about much more than just this.
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.
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.
DKS currently has a forward P/E ratio of 10.24, while RGS has a forward P/E of 31.67. We also note that DKS has a PEG ratio of 1.82. 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. RGS currently has a PEG ratio of 4.22.
Another notable valuation metric for DKS is its P/B ratio of 1.78. 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, RGS has a P/B of 1.79.
Based on these metrics and many more, DKS holds a Value grade of B, while RGS has a Value grade of C.
DKS has seen stronger estimate revision activity and sports more attractive valuation metrics than RGS, so it seems like value investors will conclude that DKS is the superior option right now.
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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Regis Corporation (RGS) : Free Stock Analysis Report
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