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FRG or PRPL: Which Is the Better Value Stock Right Now?

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Investors interested in Consumer Products - Staples stocks are likely familiar with Franchise Group (FRG) and Purple Innovation (PRPL). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Franchise Group is sporting a Zacks Rank of #1 (Strong Buy), while Purple Innovation has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that FRG likely has seen a stronger improvement to its earnings outlook than PRPL has recently. But this is only part of the picture for value investors.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

FRG currently has a forward P/E ratio of 11.39, while PRPL has a forward P/E of 37.03. We also note that FRG has a PEG ratio of 0.76. 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. PRPL currently has a PEG ratio of 2.41.

Another notable valuation metric for FRG is its P/B ratio of 4.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PRPL has a P/B of 13.31.

Based on these metrics and many more, FRG holds a Value grade of B, while PRPL has a Value grade of D.

FRG sticks out from PRPL in both our Zacks Rank and Style Scores models, so value investors will likely feel that FRG is the better option right now.


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Franchise Group, Inc. (FRG) : Free Stock Analysis Report
 
PURPLE INNOVATION, INC. (PRPL) : Free Stock Analysis Report
 
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