ITOCY or TSCO: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Retail - Miscellaneous sector have probably already heard of Itochu Corp. (ITOCY) and Tractor Supply (TSCO). But which of these two companies is the best option for those looking for undervalued stocks? 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.

Itochu Corp. has a Zacks Rank of #1 (Strong Buy), while Tractor Supply has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that ITOCY likely has seen a stronger improvement to its earnings outlook than TSCO has recently. 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 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.

ITOCY currently has a forward P/E ratio of 7.30, while TSCO has a forward P/E of 24.66. We also note that ITOCY has a PEG ratio of 0.36. 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. TSCO currently has a PEG ratio of 2.55.

Another notable valuation metric for ITOCY is its P/B ratio of 1.28. 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, TSCO has a P/B of 11.26.

Based on these metrics and many more, ITOCY holds a Value grade of A, while TSCO has a Value grade of C.

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

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Itochu Corp. (ITOCY) : Free Stock Analysis Report
 
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