Investors interested in Retail - Miscellaneous stocks are likely familiar with Hibbett Sports (HIBB) and Tractor Supply (TSCO). 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 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.
Right now, Hibbett Sports is sporting a Zacks Rank of #1 (Strong Buy), while Tractor Supply has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HIBB is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
HIBB currently has a forward P/E ratio of 9.68, while TSCO has a forward P/E of 23.54. We also note that HIBB has a PEG ratio of 1.49. 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. TSCO currently has a PEG ratio of 2.07.
Another notable valuation metric for HIBB is its P/B ratio of 1.03. 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, TSCO has a P/B of 9.11.
These are just a few of the metrics contributing to HIBB's Value grade of A and TSCO's Value grade of C.
HIBB sticks out from TSCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that HIBB is the better option right now.
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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
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