PVH or RL: Which Is the Better Value Stock Right Now?
Investors interested in Textile - Apparel stocks are likely familiar with PVH (PVH) and Ralph Lauren (RL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both PVH and Ralph Lauren have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
PVH currently has a forward P/E ratio of 13.11, while RL has a forward P/E of 19.25. We also note that PVH has a PEG ratio of 1.04. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RL currently has a PEG ratio of 2.01.
Another notable valuation metric for PVH is its P/B ratio of 1.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RL has a P/B of 3.04.
These metrics, and several others, help PVH earn a Value grade of A, while RL has been given a Value grade of C.
Both PVH and RL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PVH is the superior value option right now.
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PVH Corp. (PVH) : Free Stock Analysis Report
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
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