Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Ingles (IMKTA) or Walmart (WMT). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Ingles and Walmart are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IMKTA has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
IMKTA currently has a forward P/E ratio of 10.16, while WMT has a forward P/E of 24.11. We also note that IMKTA has a PEG ratio of 0.70. 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. WMT currently has a PEG ratio of 5.10.
Another notable valuation metric for IMKTA is its P/B ratio of 1.24. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WMT has a P/B of 4.38.
Based on these metrics and many more, IMKTA holds a Value grade of A, while WMT has a Value grade of C.
IMKTA has seen stronger estimate revision activity and sports more attractive valuation metrics than WMT, so it seems like value investors will conclude that IMKTA is the superior option right now.
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Ingles Markets, Incorporated (IMKTA) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
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