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HELE or EL: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 mins read

Investors interested in Cosmetics stocks are likely familiar with Helen of Troy (HELE) and Estee Lauder (EL). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Helen of Troy has a Zacks Rank of #1 (Strong Buy), while Estee Lauder 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 HELE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

HELE currently has a forward P/E ratio of 23.75, while EL has a forward P/E of 45.25. We also note that HELE has a PEG ratio of 2.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EL currently has a PEG ratio of 4.70.

Another notable valuation metric for HELE is its P/B ratio of 3.93. 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, EL has a P/B of 16.92.

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

HELE stands above EL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HELE is the superior value option right now.


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Helen of Troy Limited (HELE) : Free Stock Analysis Report
 
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
 
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