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GIS or NSRGY: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors looking for stocks in the Food - Miscellaneous sector might want to consider either General Mills (GIS) or Nestle SA (NSRGY). 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 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.

General Mills has a Zacks Rank of #2 (Buy), while Nestle SA has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GIS 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.

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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.

GIS currently has a forward P/E ratio of 18.86, while NSRGY has a forward P/E of 25.29. We also note that GIS has a PEG ratio of 2.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NSRGY currently has a PEG ratio of 3.08.

Another notable valuation metric for GIS is its P/B ratio of 4.18. 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, NSRGY has a P/B of 5.85.

These are just a few of the metrics contributing to GIS's Value grade of B and NSRGY's Value grade of D.

GIS sticks out from NSRGY in both our Zacks Rank and Style Scores models, so value investors will likely feel that GIS is the better option right now.


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General Mills, Inc. (GIS) : Free Stock Analysis Report
 
Nestle SA (NSRGY) : Free Stock Analysis Report
 
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Zacks Investment Research