GES or VFC: Which Is the Better Value Stock Right Now?

Investors with an interest in Textile - Apparel stocks have likely encountered both Guess (GES) and V.F. (VFC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Guess and V.F. are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GES is likely seeing its earnings outlook improve to a greater extent. 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.

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.

GES currently has a forward P/E ratio of 19.22, while VFC has a forward P/E of 21.38. We also note that GES has a PEG ratio of 1.10. 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. VFC currently has a PEG ratio of 2.

Another notable valuation metric for GES is its P/B ratio of 1.86. 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, VFC has a P/B of 8.26.

These metrics, and several others, help GES earn a Value grade of A, while VFC has been given a Value grade of D.

GES stands above VFC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GES is the superior value option right now.

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Guess?, Inc. (GES) : Free Stock Analysis Report
 
V.F. Corporation (VFC) : Free Stock Analysis Report
 
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