DKS or TSCO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Dick's Sporting Goods (DKS) or Tractor Supply (TSCO). 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 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.
Right now, Dick's Sporting Goods is sporting a Zacks Rank of #1 (Strong Buy), while Tractor Supply has a Zacks Rank of #2 (Buy). 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. But this is just one piece of the puzzle for value investors.
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.
DKS currently has a forward P/E ratio of 12.31, while TSCO has a forward P/E of 25.56. We also note that DKS has a PEG ratio of 1.73. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSCO currently has a PEG ratio of 2.83.
Another notable valuation metric for DKS is its P/B ratio of 3.49. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TSCO has a P/B of 11.69.
Based on these metrics and many more, DKS holds a Value grade of B, while TSCO has a Value grade of D.
DKS stands above TSCO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DKS is the superior value option right now.
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DICKS Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
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