DKS vs. RGS: Which Stock Is the Better Value Option?
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 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.
Dick's Sporting Goods has a Zacks Rank of #2 (Buy), while Regis has a Zacks Rank of #3 (Hold) right now. 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 11.26, while RGS has a forward P/E of 33.69. We also note that DKS has a PEG ratio of 2. 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. RGS currently has a PEG ratio of 4.49.
Another notable valuation metric for DKS 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, RGS has a P/B of 1.95.
These are just a few of the metrics contributing to DKS's Value grade of B and RGS's Value grade of C.
DKS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DKS is likely the superior value 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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