雅虎香港財經 TGT or COST: Which Is the Better Value Stock Right Now?
Investors with an interest in Retail - Discount Stores stocks have likely encountered both Target (TGT) and Costco (COST). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Currently, Target has a Zacks Rank of #2 (Buy), while Costco has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TGT has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
TGT currently has a forward P/E ratio of 16.83, while COST has a forward P/E of 45.68. We also note that TGT has a PEG ratio of 1.48. 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. COST currently has a PEG ratio of 4.82.
Another notable valuation metric for TGT is its P/B ratio of 5.43. 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, COST has a P/B of 15.65.
These metrics, and several others, help TGT earn a Value grade of A, while COST has been given a Value grade of C.
TGT stands above COST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TGT is the superior value option right now.
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Target Corporation (TGT) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
