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

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Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Dick's Sporting Goods (DKS - Free Report) or Tractor Supply (TSCO - 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.

Dick's Sporting Goods has a Zacks Rank of #2 (Buy), while Tractor Supply 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 DKS is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

DKS currently has a forward P/E ratio of 14.31, while TSCO has a forward P/E of 25.41. We also note that DKS has a PEG ratio of 2.16. 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. TSCO currently has a PEG ratio of 3.26.

Another notable valuation metric for DKS is its P/B ratio of 5.97. 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, TSCO has a P/B of 12.16.

These are just a few of the metrics contributing to DKS's Value grade of A and TSCO's Value grade of C.

DKS sticks out from TSCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that DKS is the better option right now.


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Tractor Supply Company (TSCO) - free report >>

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