Investors with an interest in Leisure and Recreation Products stocks have likely encountered both Brunswick (BC) and Pool Corp. (POOL). But which of these two stocks presents investors with the better value opportunity right now? Let’s take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Brunswick has a Zacks Rank of #2 (Buy), while Pool Corp. has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BC currently has a forward P/E ratio of 12.22, while POOL has a forward P/E of 31.93. We also note that BC has a PEG ratio of 1.22. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. POOL currently has a PEG ratio of 1.36.
Another notable valuation metric for BC is its P/B ratio of 2.92. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. By comparison, POOL has a P/B of 23.08.
These are just a few of the metrics contributing to BC’s Value grade of A and POOL’s Value grade of D.
BC 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 BC is likely the superior value option right now.
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