Which stocks should value investors buy now?

Investors interested in retail and supermarket stocks are probably familiar with Carrefour SA (CRRFY) and WalMart de Mexico SAB de CV (WMMVY). But which of these two companies is the best option for those looking for undervalued stocks? Let’s take a closer look.

The best way to find great value stocks is to combine a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Carrefour SA has a Zacks Rank of #2 (Buy), while WalMart de Mexico SAB de CV has a Zacks Rank of #3 (Hold). This system places emphasis on companies that have seen positive earnings estimate revisions, so investors should feel confident that CRRFY’s earnings outlook is likely to improve on a larger scale. However, for value investors, this is only part of the picture.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current share price levels.

Our Value category evaluates stocks using a number of key metrics, including the tried-and-true P/E, P/S, earnings yield and cash flow per share, as well as a number of other fundamental metrics commonly used by value investors.

CRRFY currently has a P/E ratio of 9.77, while WMMVY has a P/E ratio of 29.73. We also note that CRRFY has a PEG ratio of 0.73. This figure is similar to the commonly used P/E ratio, with the PEG ratio also taking into account a company’s expected earnings growth rate. WMMVY currently has a PEG ratio of 3.50.

Another important valuation metric for CRRFY is its P/B ratio of 1.05. The P/B ratio is used to compare the market value of a stock to its book value, which is defined as total assets minus total liabilities. For comparison, WMMVY has a P/B ratio of 7.72.

These and several other metrics help CRRFY earn an A rating, while WMMVY earns a C rating.

CRRFY is above WMMVY thanks to its solid earnings outlook, and based on these valuation numbers, we also believe CRRFY is the better value option currently.

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Carrefour SA (CRRFY): Free Stock Analysis Report

WalMart de Mexico SAB de CV (WMMVY): Free Stock Analysis Report

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