Yahoo Finance BURL or COST: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Retail - Discount Stores sector might want to consider either Burlington Stores (BURL) or Costco (COST). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Burlington Stores and Costco are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BURL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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 30.35, while COST has a forward P/E of 51.25. We also note that BURL has a PEG ratio of 1.23. 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. COST currently has a PEG ratio of 5.41.
Another notable valuation metric for BURL is its P/B ratio of 14.17. 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, COST has a P/B of 16.85.
Based on these metrics and many more, BURL holds a Value grade of B, while COST has a Value grade of C.
BURL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BURL is likely the superior value option right now.
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Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
