PVH or COLM: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Textile - Apparel sector have probably already heard of PVH (PVH) and Columbia Sportswear (COLM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, PVH has a Zacks Rank of #2 (Buy), while Columbia Sportswear has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PVH 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.
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.
PVH currently has a forward P/E ratio of 11.60, while COLM has a forward P/E of 22.09. We also note that PVH has a PEG ratio of 0.76. 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. COLM currently has a PEG ratio of 3.34.
Another notable valuation metric for PVH is its P/B ratio of 1.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, COLM has a P/B of 2.55.
These are just a few of the metrics contributing to PVH's Value grade of B and COLM's Value grade of D.
PVH sticks out from COLM in both our Zacks Rank and Style Scores models, so value investors will likely feel that PVH is the better option right now.
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PVH Corp. (PVH) : Free Stock Analysis Report
Columbia Sportswear Company (COLM) : Free Stock Analysis Report
