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YETI vs. POOL: Which Stock Is the Better Value Option?

Investors interested in Leisure and Recreation Products stocks are likely familiar with Yeti (YETI) and Pool Corp. (POOL). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Right now, Yeti is sporting a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that YETI likely has seen a stronger improvement to its earnings outlook than POOL has recently. But this is only part of the picture 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.

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.

YETI currently has a forward P/E ratio of 15.06, while POOL has a forward P/E of 19.21. We also note that YETI has a PEG ratio of 1.01. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. POOL currently has a PEG ratio of 2.30.

Another notable valuation metric for YETI is its P/B ratio of 6.63. 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, POOL has a P/B of 10.66.

These metrics, and several others, help YETI earn a Value grade of B, while POOL has been given a Value grade of C.

YETI 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 YETI is likely the superior value option right now.

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