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BURL or COST: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Burlington Stores (BURL - Free Report) and Costco (COST - Free Report) . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Burlington Stores has a Zacks Rank of #2 (Buy), while Costco 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 BURL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
BURL currently has a forward P/E ratio of 34.89, while COST has a forward P/E of 51.47. We also note that BURL has a PEG ratio of 1.41. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. COST currently has a PEG ratio of 5.52.
Another notable valuation metric for BURL is its P/B ratio of 16.42. 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, COST has a P/B of 18.50.
Based on these metrics and many more, BURL holds a Value grade of A, while COST has a Value grade of C.
BURL has seen stronger estimate revision activity and sports more attractive valuation metrics than COST, so it seems like value investors will conclude that BURL is the superior option right now.
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BURL or COST: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Burlington Stores (BURL - Free Report) and Costco (COST - Free Report) . 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Burlington Stores has a Zacks Rank of #2 (Buy), while Costco 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 BURL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
BURL currently has a forward P/E ratio of 34.89, while COST has a forward P/E of 51.47. We also note that BURL has a PEG ratio of 1.41. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. COST currently has a PEG ratio of 5.52.
Another notable valuation metric for BURL is its P/B ratio of 16.42. 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, COST has a P/B of 18.50.
Based on these metrics and many more, BURL holds a Value grade of A, while COST has a Value grade of C.
BURL has seen stronger estimate revision activity and sports more attractive valuation metrics than COST, so it seems like value investors will conclude that BURL is the superior option right now.