Investors interested in Food - Miscellaneous stocks are likely familiar with United Natural Foods (UNFI) and Post Holdings (POST). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, United Natural Foods has a Zacks Rank of #2 (Buy), while Post Holdings has a Zacks Rank of #3 (Hold). This means that UNFI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
UNFI currently has a forward P/E ratio of 6.28, while POST has a forward P/E of 22.35. We also note that UNFI has a PEG ratio of 0.84. 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. POST currently has a PEG ratio of 3.73.
Another notable valuation metric for UNFI is its P/B ratio of 0.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, POST has a P/B of 2.36.
These are just a few of the metrics contributing to UNFI's Value grade of A and POST's Value grade of C.
UNFI sticks out from POST in both our Zacks Rank and Style Scores models, so value investors will likely feel that UNFI is the better option right now.
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United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report
Post Holdings, Inc. (POST) : Free Stock Analysis Report
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