JSAIY or WMT: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of J. Sainsbury PLC (JSAIY) and Walmart (WMT). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, J. Sainsbury PLC has a Zacks Rank of #2 (Buy), while Walmart has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JSAIY has an improving earnings outlook. But this is just one piece of the puzzle 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.

JSAIY currently has a forward P/E ratio of 14.56, while WMT has a forward P/E of 39.43. We also note that JSAIY has a PEG ratio of 2.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WMT currently has a PEG ratio of 4.25.

Another notable valuation metric for JSAIY is its P/B ratio of 1.28. 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, WMT has a P/B of 9.

Based on these metrics and many more, JSAIY holds a Value grade of A, while WMT has a Value grade of D.

JSAIY 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 JSAIY is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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