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Investors looking for stocks in the Textile - Apparel sector might want to consider either G-III Apparel Group (GIII) or Kontoor Brands (KTB). 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 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.
Both G-III Apparel Group and Kontoor Brands have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
GIII currently has a forward P/E ratio of 14.32, while KTB has a forward P/E of 17.42. We also note that GIII has a PEG ratio of 1.24. 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. KTB currently has a PEG ratio of 2.18.
Another notable valuation metric for GIII is its P/B ratio of 1.21. 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, KTB has a P/B of 28.63.
Based on these metrics and many more, GIII holds a Value grade of A, while KTB has a Value grade of C.
Both GIII and KTB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GIII is the superior value option right now.
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GIII Apparel Group, LTD. (GIII) : Free Stock Analysis Report
Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report
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