IInvestors interested in Food – Meat Products stocks have likely encountered both Pilgrim’s Pride (PPC) and Hormel Foods (HRL). But which of these two stocks is offering better value for value investors right now? We will have to take a closer look.
There are many strategies for discovering value stocks, but we’ve found that pairing a strong Zacks ranking with an impressive rating in the Value category of our style scoring system produces the best returns. Zacks Ranking is a proven strategy that targets companies with positive earnings estimate revision trends, while our style scores allow companies to be rated based on specific characteristics.
Pilgrim’s Pride and Hormel Foods have Zacks Rank 2 (Buy) and Rank 3 (Hold) respectively. This system focuses on companies that have experienced positive revisions to their earnings estimates, so investors should feel comfortable knowing that PPC is likely to see its earnings outlook improve further. But that’s just one factor that interests value investors.
Value investors also try to analyze a wide range of traditional numbers and metrics to help determine if a company is undervalued at its current stock price level.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including popular P / E ratio, as well as P / S ratio, earnings performance, cash flow per share and a variety of other fundamentals that have been used by value investors for years.
PPC currently has a forward P / E ratio of 13.02, while HRL has a forward P / E of 24.42. We also note that PPC has a PEG ratio of 0.42. This popular figure is similar to the widely used P / E ratio, but the PEG ratio also takes into account the expected growth rate of a company’s EPS. HRL currently has a PEG ratio of 3.34.
Another notable valuation metric for PPC is its P / N ratio of 2.65. The P / B ratio pits the market value of a stock against its book value, which is defined as total assets minus total liabilities. For comparison, HRL has a P / B of 3.34.
Based on these metrics and more, PPC has a Value rating of A, while HRL has a Value rating of C.
PPC sits above HRL thanks to its strong earnings outlook, and based on these valuation numbers, we also believe PPC is the top value option right now.
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Pilgrims Pride Corporation (PPC): Free Inventory Analysis Report
Hormel Foods Corporation (HRL): Free Stock Analysis Report
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