DRVN or GPC: Which Is the Better Value Stock Right Now?

Investors interested in Automotive - Retail and Wholesale - Parts stocks are likely familiar with Driven Brands Holdings Inc. (DRVN) and Genuine Parts (GPC). 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.

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 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.

Currently, Driven Brands Holdings Inc. has a Zacks Rank of #2 (Buy), while Genuine Parts has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DRVN is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

DRVN currently has a forward P/E ratio of 9.96, while GPC has a forward P/E of 17.29. We also note that DRVN has a PEG ratio of 1.92. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GPC currently has a PEG ratio of 2.47.

Another notable valuation metric for DRVN is its P/B ratio of 2.41. 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, GPC has a P/B of 4.06.

Based on these metrics and many more, DRVN holds a Value grade of A, while GPC has a Value grade of C.

DRVN 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 DRVN is likely the superior value option right now.

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Driven Brands Holdings Inc. (DRVN): Free Stock Analysis Report

Genuine Parts Company (GPC): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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