Should Value Investors Buy US Foods Holding Corp. (USFD) Stock?

By Zacks Investment ResearchStock MarketsMar 03, 2020 11:50PM ET

www.investing.com/analysis/should-value-investors-buy-us-foods-holding-corp-usfd-stock-200513340

Should Value Investors Buy US Foods Holding Corp. (USFD) Stock?

By Zacks Investment Research | Mar 03, 2020 11:50PM ET

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is US Foods Holding Corp. (USFD). USFD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.63, while its industry has an average P/E of 19.33. Over the last 12 months, USFD's Forward P/E has been as high as 17.72 and as low as 12.23, with a median of 15.59.

USFD is also sporting a PEG ratio of 1.68. 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. USFD's PEG compares to its industry's average PEG of 2.63. Over the past 52 weeks, USFD's PEG has been as high as 2.08 and as low as 0.58, with a median of 1.82.

Another valuation metric that we should highlight is USFD's P/B ratio of 2.06. 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. This stock's P/B looks attractive against its industry's average P/B of 2.20. Within the past 52 weeks, USFD's P/B has been as high as 2.72 and as low as 1.99, with a median of 2.42.

Value investors will likely look at more than just these metrics, but the above data helps show that US Foods Holding Corp. Is likely undervalued currently. And when considering the strength of its earnings outlook, USFD sticks out at as one of the market's strongest value stocks.

US Foods Holding Corp. (USFD): Free Stock Analysis Report

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Zacks Investment Research

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Should Value Investors Buy US Foods Holding Corp. (USFD) Stock?

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