U.S. markets closed
  • S&P Futures

    3,740.25
    -25.25 (-0.67%)
     
  • Dow Futures

    30,704.00
    -174.00 (-0.56%)
     
  • Nasdaq Futures

    12,342.50
    -112.50 (-0.90%)
     
  • Russell 2000 Futures

    2,116.70
    -27.80 (-1.30%)
     
  • Crude Oil

    64.03
    +0.20 (+0.31%)
     
  • Gold

    1,689.60
    -11.10 (-0.65%)
     
  • Silver

    25.22
    -0.25 (-0.97%)
     
  • EUR/USD

    1.1966
    -0.0013 (-0.11%)
     
  • 10-Yr Bond

    1.5500
    +0.0800 (+5.44%)
     
  • Vix

    28.57
    +1.90 (+7.12%)
     
  • GBP/USD

    1.3883
    -0.0011 (-0.08%)
     
  • USD/JPY

    107.8720
    -0.1040 (-0.10%)
     
  • BTC-USD

    46,790.59
    -3,888.34 (-7.67%)
     
  • CMC Crypto 200

    935.87
    -51.34 (-5.20%)
     
  • FTSE 100

    6,650.88
    -24.59 (-0.37%)
     
  • Nikkei 225

    28,350.95
    -579.16 (-2.00%)
     

TGT or TJX: Which Is the Better Value Stock Right Now?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Investors looking for stocks in the Retail - Discount Stores sector might want to consider either Target (TGT) or TJX (TJX). 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.

Both Target and TJX have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture 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 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.

TGT currently has a forward P/E ratio of 19.91, while TJX has a forward P/E of 148.37. We also note that TGT has a PEG ratio of 2.34. 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. TJX currently has a PEG ratio of 14.13.

Another notable valuation metric for TGT is its P/B ratio of 6.48. 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, TJX has a P/B of 14.35.

These metrics, and several others, help TGT earn a Value grade of B, while TJX has been given a Value grade of D.

Both TGT and TJX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TGT is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research