Investors interested in stocks from the Leisure and Recreation Products sector have probably already heard of MasterCraft Boat Holdings, Inc. (MCFT) and Yeti (YETI). 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.
Currently, MasterCraft Boat Holdings, Inc. has a Zacks Rank of #2 (Buy), while Yeti has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MCFT has an improving earnings outlook. But this is only part of the picture 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.
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.
MCFT currently has a forward P/E ratio of 5.93, while YETI has a forward P/E of 25. We also note that MCFT has a PEG ratio of 0.59. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. YETI currently has a PEG ratio of 1.46.
Another notable valuation metric for MCFT is its P/B ratio of 3.53. 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, YETI has a P/B of 32.63.
These metrics, and several others, help MCFT earn a Value grade of A, while YETI has been given a Value grade of D.
MCFT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MCFT is likely the superior value option right now.
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MASTERCRAFT BOAT HOLDINGS, INC. (MCFT) : Free Stock Analysis Report
YETI Holdings, Inc. (YETI) : Free Stock Analysis Report
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