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Why Tractor Supply (TSCO) is a Top Value Stock for the Long-Term

Zacks Equity Research
·2 min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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Tractor Supply (TSCO)

Headquartered in Brentwood, TN, Tractor Supply Company is the largest retail farm and ranch store chain in the United States. The company focuses on recreational farmers and ranchers as well as tradesmen and small businesses. It offers a wide array of merchandise such as livestock, pet and animal products, maintenance products for agricultural and rural use, hardware and tools, lawn and garden power equipment, truck and towing products, and work apparel.

TSCO is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 20.5X for the current fiscal year compared to the Retail - Miscellaneous industry's P/E of 13X. Additionally, TSCO has a PEG Ratio of 2 and a Price/Cash Flow ratio of 17.5X. Value investors should also note TSCO's Price/Sales ratio of 1.6X.

Many value investors pay close attention to a company's earnings as well. For TSCO, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.06 to $9.58 per share for 2022. Per share TSCO boasts an average earnings surprise of 10.2%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding TSCO to their portfolios.


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Zacks Investment Research