DKS or TSCO: Which Is the Better Value Stock Right Now?
Investors with an interest in Retail - Miscellaneous stocks have likely encountered both Dick's Sporting Goods (DKS) and Tractor Supply (TSCO). But which of these two companies is the best option for those looking for undervalued stocks? 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 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 #1 (Strong Buy), while Tractor Supply has a Zacks Rank of #3 (Hold). This means that DKS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
DKS currently has a forward P/E ratio of 12.31, while TSCO has a forward P/E of 22.38. We also note that DKS has a PEG ratio of 1.76. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TSCO currently has a PEG ratio of 1.84.
Another notable valuation metric for DKS is its P/B ratio of 2.03. 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, TSCO has a P/B of 7.82.
These are just a few of the metrics contributing to DKS's Value grade of A and TSCO's Value grade of C.
DKS sticks out from TSCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that DKS is the better option right now.
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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
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