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ITOCY vs. TSCO: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Retail - Miscellaneous sector have probably already heard of Itochu Corp. (ITOCY - Free Report) and Tractor Supply (TSCO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Itochu Corp. and Tractor Supply are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.

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.

ITOCY currently has a forward P/E ratio of 6.94, while TSCO has a forward P/E of 23.42. We also note that ITOCY has a PEG ratio of 0.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSCO currently has a PEG ratio of 2.40.

Another notable valuation metric for ITOCY is its P/B ratio of 1.35. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TSCO has a P/B of 12.06.

These metrics, and several others, help ITOCY earn a Value grade of A, while TSCO has been given a Value grade of C.

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


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