Investors interested in Food - Natural Foods Products stocks are likely familiar with Performance Food Group (PFGC) and Sovos Brands, Inc. (SOVO). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Performance Food Group has a Zacks Rank of #2 (Buy), while Sovos Brands, Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PFGC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
PFGC currently has a forward P/E ratio of 19.88, while SOVO has a forward P/E of 23.42. We also note that PFGC has a PEG ratio of 1.33. 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. SOVO currently has a PEG ratio of 2.27.
Another notable valuation metric for PFGC is its P/B ratio of 2.51. 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, SOVO has a P/B of 2.90.
Based on these metrics and many more, PFGC holds a Value grade of B, while SOVO has a Value grade of C.
PFGC sticks out from SOVO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PFGC is the better option right now.
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Performance Food Group Company (PFGC) : Free Stock Analysis Report
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