Should Value Investors Buy The Kroger Co. (KR) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is The Kroger Co. (KR). KR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.72 right now. For comparison, its industry sports an average P/E of 23.74. Over the past year, KR's Forward P/E has been as high as 12.75 and as low as 9.49, with a median of 10.46.
KR is also sporting a PEG ratio of 2.63. 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. KR's industry currently sports an average PEG of 3.73. Over the last 12 months, KR's PEG has been as high as 2.89 and as low as 1.65, with a median of 2.08.
Another valuation metric that we should highlight is KR's P/B ratio of 3.52. 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. This company's current P/B looks solid when compared to its industry's average P/B of 5.58. Within the past 52 weeks, KR's P/B has been as high as 3.57 and as low as 2.73, with a median of 3.06.
Finally, we should also recognize that KR has a P/CF ratio of 6.97. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.53. Within the past 12 months, KR's P/CF has been as high as 6.97 and as low as 5.09, with a median of 5.77.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Kroger Co. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KR feels like a great value stock at the moment.
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The Kroger Co. (KR) : Free Stock Analysis Report
