Advertisement
Canada markets open in 5 hours 34 minutes

  • S&P/TSX

    21,871.96
    +64.59 (+0.30%)
     

  • S&P 500

    5,010.60
    +43.37 (+0.87%)
     

  • DOW

    38,239.98
    +253.58 (+0.67%)
     

  • CAD/USD

    0.7299
    -0.0002 (-0.02%)
     

  • CRUDE OIL

    82.40
    +0.50 (+0.61%)
     

  • Bitcoin CAD

    90,754.05
    +214.45 (+0.24%)
     

  • CMC Crypto 200

    1,393.28
    -21.48 (-1.52%)
     

  • GOLD FUTURES

    2,323.10
    -23.30 (-0.99%)
     

  • RUSSELL 2000

    1,967.47
    +19.82 (+1.02%)
     

  • 10-Yr Bond

    4.6230
    +0.0080 (+0.17%)
     

  • NASDAQ futures

    17,353.00
    +3.00 (+0.02%)
     

  • VOLATILITY

    16.67
    -0.27 (-1.59%)
     

  • FTSE

    8,060.23
    +36.36 (+0.45%)
     

  • NIKKEI 225

    37,552.16
    +113.55 (+0.30%)
     

  • CAD/EUR

    0.6833
    -0.0017 (-0.25%)
     

MRWSY vs. FARM: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors looking for stocks in the Food - Natural Foods Products sector might want to consider either WM MORRISON SUP (MRWSY) or Farmer Brothers (FARM). 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 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.

WM MORRISON SUP and Farmer Brothers are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MRWSY is likely seeing its earnings outlook improve to a greater extent. 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.

ADVERTISEMENT

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.

MRWSY currently has a forward P/E ratio of 15.30, while FARM has a forward P/E of 117.92. We also note that MRWSY has a PEG ratio of 2.19. 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. FARM currently has a PEG ratio of 14.74.

Another notable valuation metric for MRWSY is its P/B ratio of 0.98. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FARM has a P/B of 1.50.

These are just a few of the metrics contributing to MRWSY's Value grade of A and FARM's Value grade of F.

MRWSY 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 MRWSY is likely the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WM MORRISON SUP (MRWSY) : Free Stock Analysis Report
 
Farmer Brothers Company (FARM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research