ELY or POOL: Which Is the Better Value Stock Right Now?
Investors interested in Leisure and Recreation Products stocks are likely familiar with Callaway Golf (ELY) and Pool Corp. (POOL). 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Callaway Golf and Pool Corp. are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ELY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
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.
ELY currently has a forward P/E ratio of 23.28, while POOL has a forward P/E of 26.46. We also note that ELY has a PEG ratio of 0.93. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. POOL currently has a PEG ratio of 1.13.
Another notable valuation metric for ELY is its P/B ratio of 2.93. 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, POOL has a P/B of 18.96.
These are just a few of the metrics contributing to ELY's Value grade of B and POOL's Value grade of C.
ELY sticks out from POOL in both our Zacks Rank and Style Scores models, so value investors will likely feel that ELY is the better option right now.
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Callaway Golf Company (ELY) : Free Stock Analysis Report
Pool Corporation (POOL) : Free Stock Analysis Report
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