Investors interested in stocks from the Consumer Products – Staples sector have probably already heard of Edgewell Personal Care (EPC) and WD-40 (WDFC). 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Edgewell Personal Care and WD-40 are both sporting a Zacks Rank of # 2 (Buy) right now. 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 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
EPC currently has a forward P/E ratio of 9.16, while WDFC has a forward P/E of 36.95. We also note that EPC has a PEG ratio of 3.38. 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. WDFC currently has a PEG ratio of 3.69.
Another notable valuation metric for EPC is its P/B ratio of 1.25. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WDFC has a P/B of 16.53.
These metrics, and several others, help EPC earn a Value grade of A, while WDFC has been given a Value grade of F.
Both EPC and WDFC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EPC is the superior value option right now.
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