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ITOCY vs. TSCO: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Retail - Miscellaneous sector have probably already heard of Itochu Corp. (ITOCY) and Tractor Supply (TSCO). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Itochu Corp. and Tractor Supply have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

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.

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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.

ITOCY currently has a forward P/E ratio of 8.44, while TSCO has a forward P/E of 25.67. We also note that ITOCY has a PEG ratio of 0.50. 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. TSCO currently has a PEG ratio of 2.84.

Another notable valuation metric for ITOCY is its P/B ratio of 1.29. 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, TSCO has a P/B of 11.61.

Based on these metrics and many more, ITOCY holds a Value grade of A, while TSCO has a Value grade of D.

Both ITOCY and TSCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ITOCY is the superior value option right now.


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Itochu Corp. (ITOCY) : Free Stock Analysis Report
 
Tractor Supply Company (TSCO) : Free Stock Analysis Report
 
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