SP vs. MNRO: Which Stock Should Value Investors Buy Now?
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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
SP Plus has a Zacks Rank of #2 (Buy), while Monro Muffler Brake has a Zacks Rank of #5 (Strong Sell) right now. 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 factor that value investors are interested in.
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 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.
SP currently has a forward P/E ratio of 12.63, while MNRO has a forward P/E of 25.55. We also note that SP has a PEG ratio of 1.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MNRO currently has a PEG ratio of 2.22.
Another notable valuation metric for SP is its P/B ratio of 2.32. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MNRO has a P/B of 2.69.
These are just a few of the metrics contributing to SP's Value grade of B and MNRO's Value grade of D.
SP sticks out from MNRO in both our Zacks Rank and Style Scores models, so value investors will likely feel that SP is the better option right now.
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SP Plus Corporation (SP) : Free Stock Analysis Report
Monro Muffler Brake, Inc. (MNRO) : Free Stock Analysis Report
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