HIBB vs. TSCO: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Retail - Miscellaneous sector have probably already heard of Hibbett Sports (HIBB) and Tractor Supply (TSCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Hibbett Sports has a Zacks Rank of #1 (Strong Buy), while Tractor Supply has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HIBB is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

HIBB currently has a forward P/E ratio of 11.26, while TSCO has a forward P/E of 24.20. We also note that HIBB has a PEG ratio of 0.81. 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 1.91.

Another notable valuation metric for HIBB is its P/B ratio of 2.33. 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, TSCO has a P/B of 10.49.

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

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


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Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
 
Tractor Supply Company (TSCO) : Free Stock Analysis Report
 
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