Yahoo Finance ADRNY or KMB: Which Is the Better Value Stock Right Now?
Investors with an interest in Consumer Products - Staples stocks have likely encountered both Ahold NV (ADRNY) and Kimberly-Clark (KMB). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Ahold NV has a Zacks Rank of #2 (Buy), while Kimberly-Clark has a Zacks Rank of #3 (Hold). This means that ADRNY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ADRNY currently has a forward P/E ratio of 11.76, while KMB has a forward P/E of 19.50. We also note that ADRNY has a PEG ratio of 2.48. 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. KMB currently has a PEG ratio of 3.89.
Another notable valuation metric for ADRNY is its P/B ratio of 1.90. 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, KMB has a P/B of 38.87.
Based on these metrics and many more, ADRNY holds a Value grade of A, while KMB has a Value grade of C.
ADRNY 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 ADRNY is likely the superior value option right now.
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Ahold NV (ADRNY) : Free Stock Analysis Report
Kimberly-Clark Corporation (KMB) : Free Stock Analysis Report
