Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Kenvue (KVUE) or Procter & Gamble (PG). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Kenvue has a Zacks Rank of #2 (Buy), while Procter & Gamble has a Zacks Rank of #3 (Hold) right now. This means that KVUE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
KVUE currently has a forward P/E ratio of 16.63, while PG has a forward P/E of 22.90. We also note that KVUE has a PEG ratio of 4.16. 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. PG currently has a PEG ratio of 5.34.
Another notable valuation metric for KVUE is its P/B ratio of 3.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PG has a P/B of 7.06.
These metrics, and several others, help KVUE earn a Value grade of B, while PG has been given a Value grade of C.
KVUE stands above PG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KVUE is the superior value option right now.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
