Send me real-time posts from this site at my email
Zacks

ADRNY vs. PRPL: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Ahold NV (ADRNY) and Purple Innovation (PRPL). 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 pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Ahold NV and Purple Innovation are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ADRNY currently has a forward P/E ratio of 10.49, while PRPL has a forward P/E of 75.61. We also note that ADRNY has a PEG ratio of 2.22. 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. PRPL currently has a PEG ratio of 5.04.

Another notable valuation metric for ADRNY is its P/B ratio of 1.97. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PRPL has a P/B of 95.79.

These metrics, and several others, help ADRNY earn a Value grade of A, while PRPL has been given a Value grade of D.

Both ADRNY and PRPL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ADRNY is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Ahold NV (ADRNY): Free Stock Analysis Report
 
PURPLE INNOVATION, INC. (PRPL): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue