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PPC vs. HRL: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Food - Meat Products sector have probably already heard of Pilgrim's Pride (PPC - Free Report) and Hormel Foods (HRL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Pilgrim's Pride has a Zacks Rank of #1 (Strong Buy), while Hormel Foods has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PPC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PPC currently has a forward P/E ratio of 10.24, while HRL has a forward P/E of 25.25. We also note that PPC has a PEG ratio of 0.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HRL currently has a PEG ratio of 3.17.
Another notable valuation metric for PPC is its P/B ratio of 2.87. 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, HRL has a P/B of 3.72.
Based on these metrics and many more, PPC holds a Value grade of B, while HRL has a Value grade of C.
PPC stands above HRL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PPC is the superior value option right now.
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PPC vs. HRL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Food - Meat Products sector have probably already heard of Pilgrim's Pride (PPC - Free Report) and Hormel Foods (HRL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Pilgrim's Pride has a Zacks Rank of #1 (Strong Buy), while Hormel Foods has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PPC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PPC currently has a forward P/E ratio of 10.24, while HRL has a forward P/E of 25.25. We also note that PPC has a PEG ratio of 0.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HRL currently has a PEG ratio of 3.17.
Another notable valuation metric for PPC is its P/B ratio of 2.87. 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, HRL has a P/B of 3.72.
Based on these metrics and many more, PPC holds a Value grade of B, while HRL has a Value grade of C.
PPC stands above HRL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PPC is the superior value option right now.