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ADRNY vs. KMB: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Consumer Products - Staples stocks have likely encountered both Ahold NV (ADRNY - Free Report) and Kimberly-Clark (KMB - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Ahold NV has a Zacks Rank of #2 (Buy), while Kimberly-Clark has a Zacks Rank of #3 (Hold). This means that ADRNY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

ADRNY currently has a forward P/E ratio of 12.52, while KMB has a forward P/E of 19.23. We also note that ADRNY has a PEG ratio of 2.78. 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. KMB currently has a PEG ratio of 3.77.

Another notable valuation metric for ADRNY is its P/B ratio of 1.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, KMB has a P/B of 247.54.

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

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


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