GAP or DECK: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Gap (GAP) and Deckers (DECK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.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.Both Gap and Deckers have a Zacks Rank of # 1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.GAP currently has a forward P/E ratio of 11.95, while DECK has a forward P/E of 37.20. We also note that GAP has a PEG ratio of 1.08. 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. DECK currently has a PEG ratio of 2.86.Another notable valuation metric for GAP is its P/B ratio of 2.91. 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, DECK has a P/B of 13.92.These metrics, and several others, help GAP earn a Value grade of A, while DECK has been given a Value grade of F.Both GAP and DECK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GAP is the superior value option right now.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.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 The Gap, Inc. (GAP): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks