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

Flowers Foods, Inc. FLO is currently trading at an attractive valuation, considering its price-to-sales (P/S) multiple, which is significantly lower than both the Zacks Food – Miscellaneous industry and the broader Consumer Staples sector. FLO’s forward 12-month P/S ratio is 0.96, lower than the industry average of 1.48 and the sector average of 8.53.

This discrepancy in valuation suggests that the stock may be undervalued relative to its peers, presenting a compelling opportunity for investors seeking value in the consumer staples space. With a Value Score of B, Flowers Foods strengthens its investment appeal, reflecting a favorable risk-reward profile.

Technical indicators are supportive of Flowers Foods’ performance. The stock is trading above both its 50-day and 200-day moving averages, indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in the company’s financial health and prospects.

While its recent price performance slightly trails industry peers, FLO has managed to outperform the broader market, reflecting its steady performance amid macroeconomic uncertainty. Shares of FLO have risen 5.3% in the past three months compared with the industry’s 8.6% growth and the S&P 500’s gain of 2.4%. Investors may find this combination of value, technical strength and relative market outperformance a good reason to consider Flowers Foods as a long-term investment opportunity.

Energizer Holdings Inc. ENR appears to be an attractive value investment, trading at a forward 12-month price-to-earnings (P/E) ratio of 8.22, significantly lower compared with the industry’s average of 18.91. This indicates that ENR is undervalued relative to its industry peers, offering potential upside for investors.

ENR's strong Value Score of A further highlights its appeal as a potential investment, underscoring its affordability and attractiveness in terms of valuation. For value-focused investors, this combination of a low P/E ratio and high Value Score indicates the stock could deliver solid returns, provided the company maintains stable earnings growth and manages external risks effectively.

Although the stock has gained only 3.9% over the past six months compared with the industry’s 10.1% growth, its closing price of $29.05 on Tuesday, which is 20.9% below its 52-week high of $36.72 on Nov. 14, 2023, represents an attractive entry point for investors looking for value.

The Zacks Consensus Estimate for earnings per share has been revised upward, reflecting the positive sentiment around Energizer. Over the past 30 days, analysts have increased their estimates for the current year by 2 cents to $3.27 per share and the next year by 3 cents to $3.54. These estimates indicate year-over-year growth of 5.8% and 8.4%, respectively.

ENR’s Strategic Initiatives Drive Efficiency & Growth

Energizer is focused on strengthening brand loyalty through targeted pricing strategies and promotions, ensuring profitability while capturing greater market share. A key element of this approach is Project Momentum, an initiative aimed at cost savings and improving operational efficiencies. In the third quarter of fiscal 2024, Project Momentum delivered $14 million in savings, contributing to a 270-basis point improvement in the gross margin, which increased to 41.5%.

Energizer’s market expansion plans emphasize leveraging its global distribution network to accelerate growth in developing markets. The company is driving innovation across its product lines, introducing new offerings in categories such as portable power and auto care to meet evolving consumer demands. This focus on innovation is expected to further strengthen Energizer’s market position and support sustained growth.

A central pillar of Energizer’s financial strategy is debt reduction. Over the past two years, the company has repaid more than $430 million in debt, significantly lowering its leverage and enhancing financial stability. This disciplined approach has reduced financial risks and strengthened the balance sheet, positioning ENR for long-term success.

The Auto Care and Battery segments’ performance has been strong. The Auto Care segment experienced a 2.2% increase in revenues and a 470-basis point rise in the profit margin while the Battery segment saw profit growth of 6.2% in the fiscal third quarter. These results highlight Energizer's ability to effectively manage its diverse portfolio and drive performance across key business areas.

Investors interested in Consumer Staples stocks should always be looking to find the best-performing companies in the group. Has Ingredion (INGR) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question.

Ingredion is a member of the Consumer Staples sector. This group includes 184 individual stocks and currently holds a Zacks Sector Rank of #11. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Ingredion is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for INGR's full-year earnings has moved 2.6% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Based on the latest available data, INGR has gained about 23.9% so far this year. At the same time, Consumer Staples stocks have gained an average of 8.5%. As we can see, Ingredion is performing better than its sector in the calendar year.

Kerry Group PLC (KRYAY) is another Consumer Staples stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 16.4%.

In Kerry Group PLC's case, the consensus EPS estimate for the current year increased 2.8% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Ingredion belongs to the Food - Miscellaneous industry, which includes 45 individual stocks and currently sits at #91 in the Zacks Industry Rank. Stocks in this group have gained about 3% so far this year, so INGR is performing better this group in terms of year-to-date returns. Kerry Group PLC is also part of the same industry.

Investors interested in the Consumer Staples sector may want to keep a close eye on Ingredion and Kerry Group PLC as they attempt to continue their solid performance.

Zacks Investment Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Ingredion (INGR). INGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.05, while its industry has an average P/E of 16.91. Over the past 52 weeks, INGR's Forward P/E has been as high as 13.05 and as low as 9.36, with a median of 11.45.

INGR is also sporting a PEG ratio of 1.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INGR's industry has an average PEG of 1.46 right now. Over the past 52 weeks, INGR's PEG has been as high as 1.19 and as low as 0.85, with a median of 1.05.

Finally, we should also recognize that INGR has a P/CF ratio of 10.42. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. INGR's P/CF compares to its industry's average P/CF of 18.22. Over the past 52 weeks, INGR's P/CF has been as high as 10.42 and as low as 7.10, with a median of 8.63.

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

Zacks Investment Research

For Immediate Release

Chicago, IL – September 10, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Carriage Services, Inc. CSV, Edgewell Personal Care Co. EPC, Ingredion Inc. INGR and Flowers Foods, Inc. FLO.

Here are highlights from Monday’s Analyst Blog:

4 Low-Beta Stocks with Upside to Counter a Volatile September

Volatility has returned to Wall Street after a solid August. Several factors are responsible for weighing on investors’ sentiments. Also, September has traditionally been known as the worst month for stocks. Also, stocks have traditionally suffered in the two months leading up to the election.

Thus, it would be ideal to avoid volatile stocks and settle for low-beta consumer staples stocks like Carriage Services, Inc., Edgewell Personal Care Co., Ingredion Inc. and Flowers Foods, Inc. with a solid upside.

Weak Economic Data Dents Stock Performance

Soft economic data released over the past couple of weeks have reignited fears of a softening economy. Concerns over the economy’s health grew after data showed that the unemployment rate increased to 4.3% in July.

On Friday, fresh data showed that nonfarm payrolls increased just 142,000 in August, below the consensus estimate of a rise of 161,000. This added fuel to the fears of a softening economy.

Also, the Institute of Supply Management (ISM) manufacturing index declined for the fifth consecutive month in August. The Fed's Beige Book revealed that economic activity remained unchanged or even dropped in nine regions recently.

Following the jobs report on Friday, stocks tumbled, with the S&P 500 clocking its worst week since March 2023. The S&P 500 declined 4.3% for the week. The Nasdaq ended the week 5.8% lower, its worst week performance since 2022, while the Dow closed lower 2.9%.

Tricky September, Election Day Approaching

September has proven to be the worst month for Wall Street, with stocks underperforming. This has been happening since 1950, with the S&P suffering the most in September. Experts believe that this happens because, in September, investors return to work after the summer vacation and tend to readjust their portfolios. This weighs on markets as they tend to sell during this time.

Also, the two months leading to the Presidential election have historically seen markets turn volatile. The S&P 500 has suffered during this period since 2008, with an average negative return of 5.8%. With election day (Nov. 5) less than two months away, the volatility has started this time too.

Low-Beta Stocks to Play Safe

Given this situation, investors should draw a strategy to focus on low-risk assets and a combination of parameters that lead to better returns. The best way to do so is by banking on defensive stocks like consumer staples with low-beta (0 to 1) stocks with a high-dividend yield and a favorable Zacks Rank. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carriage Services

Carriage Services, Inc. is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.

Carriage Services has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the last 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.94 and a current dividend yield of 1.39%.

Edgewell Personal Care Company

Edgewell Personal Care Company manufactures and markets personal care products. EPC’s brand consists of Schick and Wilkinson Sword men's and women's shaving systems and disposable razors; Edge and Skintimate shave preparations; Playtex, Stayfree, Carefree and o.b. feminine care products; Banana Boat and Hawaiian Tropic sun care products; Playtex infant feeding, Diaper Genie and gloves; Wet Ones moist wipes.

Edgewell Personal Care Company has an expected earnings growth rate of 17.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the last 60 days. EPC currently carries a Zacks Rank #2. Edgewell Personal Care Company has a beta of 0.87 and a current dividend yield of 1.57%.

Ingredion Inc.

Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.

Ingredion’s expected earnings growth rate for the current year is 5.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. INGR currently has a Zacks Rank #2. Ingredion has a beta of 0.73 and a current dividend yield of 2.31%.

Flowers Foods

Flowers Foods, Inc. emphasizes on providing high-quality baked items, developing strong brands, making innovations to improve capabilities and undertaking prudent acquisitions. Along with these, FLO strives toward developing technology advanced bakeries.

Flowers Foods has an expected earnings growth rate of 4.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 60 days. FLO currently has a Zacks Rank #2. Flowers Foods has a beta of 0.36 and a current dividend yield of 4.10%.

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