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SP or MNRO: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Cadence Design Systems (CDNS) closed the most recent trading day at $67.72, moving -0.56% from the previous trading session.

Investors looking for stocks in the Consumer Services - Miscellaneous sector might want to consider either SP Plus (SP) or Monro Muffler Brake (MNRO). 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.

Currently, SP Plus has a Zacks Rank of #1 (Strong Buy), while Monro Muffler Brake has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SP is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

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.

SP currently has a forward P/E ratio of 13.98, while MNRO has a forward P/E of 32.28. We also note that SP has a PEG ratio of 1.40. 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. MNRO currently has a PEG ratio of 2.58.

Another notable valuation metric for SP is its P/B ratio of 2.30. 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, MNRO has a P/B of 3.76.

These metrics, and several others, help SP earn a Value grade of B, while MNRO has been given a Value grade of C.

SP has seen stronger estimate revision activity and sports more attractive valuation metrics than MNRO, so it seems like value investors will conclude that SP is the superior option right now.


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