NOMD or POST: Which Is the Better Value Stock Right Now?
Investors interested in Food - Miscellaneous stocks are likely familiar with Nomad Foods (NOMD) and Post Holdings (POST). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Nomad Foods has a Zacks Rank of #2 (Buy), while Post Holdings has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NOMD 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
NOMD currently has a forward P/E ratio of 12.48, while POST has a forward P/E of 20.51. We also note that NOMD has a PEG ratio of 1.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. POST currently has a PEG ratio of 3.42.
Another notable valuation metric for NOMD is its P/B ratio of 1.42. 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, POST has a P/B of 2.16.
Based on these metrics and many more, NOMD holds a Value grade of B, while POST has a Value grade of C.
NOMD stands above POST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NOMD is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Nomad Foods Limited (NOMD) : Free Stock Analysis Report
Post Holdings, Inc. (POST) : Free Stock Analysis Report
To read this article on Zacks.com click here.
