Yahoo Finance SJM vs. FLO: Which Stock Is the Better Value Option?
Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Smucker (SJM) or Flowers Foods (FLO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Smucker has a Zacks Rank of #2 (Buy), while Flowers Foods has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that SJM likely has seen a stronger improvement to its earnings outlook than FLO has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SJM currently has a forward P/E ratio of 11.08, while FLO has a forward P/E of 19.91. We also note that SJM has a PEG ratio of 1.70. 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. FLO currently has a PEG ratio of 4.71.
Another notable valuation metric for SJM is its P/B ratio of 1.59. 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, FLO has a P/B of 3.89.
Based on these metrics and many more, SJM holds a Value grade of B, while FLO has a Value grade of C.
SJM sticks out from FLO in both our Zacks Rank and Style Scores models, so value investors will likely feel that SJM is the better 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
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
Flowers Foods, Inc. (FLO) : Free Stock Analysis Report
