Back to top

Image: Bigstock

GES vs. GIL: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Textile - Apparel sector might want to consider either Guess (GES - Free Report) or Gildan Activewear (GIL - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Guess has a Zacks Rank of #2 (Buy), while Gildan Activewear has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GES 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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

GES currently has a forward P/E ratio of 13.83, while GIL has a forward P/E of 16.96. We also note that GES has a PEG ratio of 0.79. 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. GIL currently has a PEG ratio of 1.96.

Another notable valuation metric for GES is its P/B ratio of 2.39. 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, GIL has a P/B of 2.92.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Guess?, Inc. (GES) - free report >>

Gildan Activewear, Inc. (GIL) - free report >>

Published in