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KR or WMMVY: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Kroger (KR - Free Report) and WalMart de Mexico SAB de CV (WMMVY - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Kroger has a Zacks Rank of #2 (Buy), while WalMart de Mexico SAB de CV has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KR is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

KR currently has a forward P/E ratio of 11.84, while WMMVY has a forward P/E of 24.90. We also note that KR has a PEG ratio of 1.05. 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. WMMVY currently has a PEG ratio of 2.48.

Another notable valuation metric for KR is its P/B ratio of 3.55. 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, WMMVY has a P/B of 6.66.

Based on these metrics and many more, KR holds a Value grade of A, while WMMVY has a Value grade of C.

KR has seen stronger estimate revision activity and sports more attractive valuation metrics than WMMVY, so it seems like value investors will conclude that KR is the superior option right now.


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