FLO vs. NSRGY: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Food - Miscellaneous sector have probably already heard of Flowers Foods (FLO) and Nestle SA (NSRGY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, Flowers Foods is sporting a Zacks Rank of #2 (Buy), while Nestle SA has a Zacks Rank of #5 (Strong Sell). This means that FLO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
FLO currently has a forward P/E ratio of 17.75, while NSRGY has a forward P/E of 18.02. We also note that FLO has a PEG ratio of 4.27. 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. NSRGY currently has a PEG ratio of 5.99.
Another notable valuation metric for FLO is its P/B ratio of 3.40. 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, NSRGY has a P/B of 6.41.
Based on these metrics and many more, FLO holds a Value grade of B, while NSRGY has a Value grade of D.
FLO stands above NSRGY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FLO is the superior value option right now.
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Flowers Foods, Inc. (FLO) : Free Stock Analysis Report
Nestle SA (NSRGY) : Free Stock Analysis Report