Investors looking for stocks in the Textile - Apparel sector might want to consider either Gildan Activewear (GIL) or Under Armour (UAA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Gildan Activewear is sporting a Zacks Rank of #2 (Buy), while Under Armour 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 GIL has an improving earnings outlook. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GIL currently has a forward P/E ratio of 18.45, while UAA has a forward P/E of 54.96. We also note that GIL has a PEG ratio of 1.29. 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. UAA currently has a PEG ratio of 2.03.
Another notable valuation metric for GIL is its P/B ratio of 3.95. 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, UAA has a P/B of 4.09.
Based on these metrics and many more, GIL holds a Value grade of B, while UAA has a Value grade of C.
GIL sticks out from UAA in both our Zacks Rank and Style Scores models, so value investors will likely feel that GIL is the better option right now.
Gildan Activewear, Inc. (GIL): Free Stock Analysis Report
Under Armour, Inc. (UAA): Free Stock Analysis Report
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Zacks Investment Research