RBGLY or CLX: Which Is the Better Value Stock Right Now?
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Investors interested in Soap and Cleaning Materials stocks are likely familiar with Reckitt Benckiser Group PLC (RBGLY) and Clorox (CLX). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Reckitt Benckiser Group PLC has a Zacks Rank of #1 (Strong Buy), while Clorox has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RBGLY 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 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.
RBGLY currently has a forward P/E ratio of 15.30, while CLX has a forward P/E of 23.98. We also note that RBGLY has a PEG ratio of 2.44. 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. CLX currently has a PEG ratio of 3.18.
Another notable valuation metric for RBGLY is its P/B ratio of 4.25. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CLX has a P/B of 40.07.
Based on these metrics and many more, RBGLY holds a Value grade of B, while CLX has a Value grade of D.
RBGLY 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 RBGLY is likely the superior value option right now.
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Reckitt Benckiser Group PLC (RBGLY) : Free Stock Analysis Report
The Clorox Company (CLX) : Free Stock Analysis Report