Investors with an interest in Textile - Apparel stocks have likely encountered both Delta Apparel (DLA) and V.F. (VFC). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Delta Apparel has a Zacks Rank of #2 (Buy), while V.F. 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 DLA 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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DLA currently has a forward P/E ratio of 14.26, while VFC has a forward P/E of 26.97. We also note that DLA has a PEG ratio of 0.95. 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. VFC currently has a PEG ratio of 2.56.
Another notable valuation metric for DLA is its P/B ratio of 1.15. 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, VFC has a P/B of 8.72.
These metrics, and several others, help DLA earn a Value grade of B, while VFC has been given a Value grade of F.
DLA stands above VFC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DLA is the superior value option right now.
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Delta Apparel, Inc. (DLA) : Free Stock Analysis Report
V.F. Corporation (VFC) : Free Stock Analysis Report
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