PFGC vs. SOVO: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Food - Natural Foods Products sector have probably already heard of Performance Food Group (PFGC) and Sovos Brands, Inc. (SOVO). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Both Performance Food Group and Sovos Brands, Inc. have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PFGC currently has a forward P/E ratio of 12.28, while SOVO has a forward P/E of 31.94. We also note that PFGC has a PEG ratio of 0.74. 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. SOVO currently has a PEG ratio of 2.35.
Another notable valuation metric for PFGC is its P/B ratio of 2.29. 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 4.38.
These metrics, and several others, help PFGC earn a Value grade of A, while SOVO has been given a Value grade of C.
Both PFGC and SOVO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PFGC is the superior value option right now.
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Performance Food Group Company (PFGC) : Free Stock Analysis Report
Sovos Brands, Inc. (SOVO) : Free Stock Analysis Report
