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MBUU vs. POOL: Which Stock Is the Better Value Option?

Zacks Equity Research
Fair Isaac (FICO) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

Investors looking for stocks in the Leisure and Recreation Products sector might want to consider either Malibu Boats (MBUU) or Pool Corp. (POOL). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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.

Right now, Malibu Boats is sporting a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MBUU likely has seen a stronger improvement to its earnings outlook than POOL has recently. However, value investors will care about much more than just this.

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.

MBUU currently has a forward P/E ratio of 11.42, while POOL has a forward P/E of 25.98. We also note that MBUU has a PEG ratio of 0.76. 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. POOL currently has a PEG ratio of 1.11.

Another notable valuation metric for MBUU is its P/B ratio of 4.97. 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, POOL has a P/B of 28.96.

These metrics, and several others, help MBUU earn a Value grade of A, while POOL has been given a Value grade of C.

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


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