ASO vs. YETI: Which Stock Should Value Investors Buy Now?
ASO vs. YETI: Which Stock Is the Better Value Option?
Investors interested in stocks from the Leisure and Recreation Products sector have probably already heard of Academy Sports and Outdoors, Inc. (ASO) and Yeti (YETI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, both Academy Sports and Outdoors, Inc. and Yeti are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
ASO currently has a forward P/E ratio of 8.63, while YETI has a forward P/E of 39. We also note that ASO has a PEG ratio of 2.07. 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. YETI currently has a PEG ratio of 2.25.
Another notable valuation metric for ASO is its P/B ratio of 3.10. 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, YETI has a P/B of 22.01.
These metrics, and several others, help ASO earn a Value grade of A, while YETI has been given a Value grade of F.
Both ASO and YETI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASO is the superior value option right now.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks 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
Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report
YETI Holdings, Inc. (YETI): Free Stock Analysis Report
To read this article on Zacks.com click here.