Investors looking for stocks in the Retail - Apparel and Shoes sector might want to consider either Nordstrom (JWN) or BOOHOO GRP PLC (BHOOY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Nordstrom and BOOHOO GRP PLC are sporting a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
JWN currently has a forward P/E ratio of 11.57, while BHOOY has a forward P/E of 53.71. We also note that JWN has a PEG ratio of 1.93. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BHOOY currently has a PEG ratio of 2.03.
Another notable valuation metric for JWN is its P/B ratio of 7.24. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BHOOY has a P/B of 13.93.
Based on these metrics and many more, JWN holds a Value grade of B, while BHOOY has a Value grade of D.
Both JWN and BHOOY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that JWN is the superior value option right now.
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