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FRG vs. KMB: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Franchise Group (FRG) or Kimberly-Clark (KMB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Franchise Group has a Zacks Rank of #2 (Buy), while Kimberly-Clark has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FRG has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

FRG currently has a forward P/E ratio of 10.26, while KMB has a forward P/E of 20.15. We also note that FRG has a PEG ratio of 0.68. 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. KMB currently has a PEG ratio of 4.03.

Another notable valuation metric for FRG is its P/B ratio of 3. 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, KMB has a P/B of 60.26.

These are just a few of the metrics contributing to FRG's Value grade of A and KMB's Value grade of C.

FRG sticks out from KMB 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
 
KimberlyClark Corporation (KMB) : Free Stock Analysis Report
 
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