Yahoo Finance BURL vs. COST: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Burlington Stores (BURL) and Costco (COST). 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.
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.
Currently, Burlington Stores has a Zacks Rank of #2 (Buy), while Costco has a Zacks Rank of #3 (Hold). This means that BURL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 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.
BURL currently has a forward P/E ratio of 31.26, while COST has a forward P/E of 53.37. We also note that BURL has a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. COST currently has a PEG ratio of 5.64.
Another notable valuation metric for BURL is its P/B ratio of 14.70. 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, COST has a P/B of 17.56.
Based on these metrics and many more, BURL holds a Value grade of B, while COST has a Value grade of C.
BURL sticks out from COST in both our Zacks Rank and Style Scores models, so value investors will likely feel that BURL is the better option right now.
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Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
