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Why Kroger (KR) is a Top Value Stock for the Long-Term

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

Kroger (KR)

The Kroger Co., which operates in the thin-margin grocery industry, has been undergoing a complete makeover, not only with respect to products but also in terms of the way consumers prefer shopping grocery. The company is launching plant-based products as well as eyeing technological expansion.  It acquired meal kit company Home Chef and partnered with British online grocery delivery firm Ocado that reinforces its position in the online ordering, automated fulfillment and home delivery space. It has also introduced grocery delivery service Kroger Ship and inked a deal with driverless car company Nuro.

KR boasts a Value Style Score of A and VGM Score of A, and holds a Zacks Rank #2 (Buy) rating. Shares of Kroger are trading at a forward earnings multiple of 11.1X, as well as a PEG Ratio of 1, a Price/Cash Flow ratio of 5.3X, and a Price/Sales ratio of 0.2X.

Many value investors pay close attention to a company's earnings as well. For KR, six analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.13 to $4.04 per share for 2023. Per share KR boasts an average earnings surprise of 15.7%.

KR should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.


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