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USFD Or LNDC: Which Is The Better Value Stock Right Now?

By Zacks Investment ResearchStock MarketsMar 17, 2020 11:40PM ET
www.investing.com/analysis/usfd-or-lndc-which-is-the-better-value-stock-right-now-200517066
USFD Or LNDC: Which Is The Better Value Stock Right Now?
By Zacks Investment Research   |  Mar 17, 2020 11:40PM ET
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Investors with an interest in Food - Miscellaneous stocks have likely encountered both US Foods Holding Corp. (USFD) and Landec (LNDC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, US Foods Holding Corp. has a Zacks Rank of #2 (Buy), while Landec has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that USFD has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

USFD currently has a forward P/E ratio of 4.56, while LNDC has a forward P/E of 40.56. We also note that USFD has a PEG ratio of 0.46. 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. LNDC currently has a PEG ratio of 4.06.

Another notable valuation metric for USFD is its P/B ratio of 0.73. 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, LNDC has a P/B of 1.05.

These are just a few of the metrics contributing to USFD's Value grade of A and LNDC's Value grade of C.

USFD has seen stronger estimate revision activity and sports more attractive valuation metrics than LNDC, so it seems like value investors will conclude that USFD is the superior option right now.



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

Landec Corporation (LNDC): Free Stock Analysis Report

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USFD Or LNDC: Which Is The Better Value Stock Right Now?
 

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USFD Or LNDC: Which Is The Better Value Stock Right Now?

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