Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Retailers - Department Stores industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Retailers - Department Stores Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Retailers - Department Stores Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Retailers - Department Stores industry for Friday, August 23, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Retailers - Department Stores industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Jowell Global Ltd’s Value Grade

Value Grade:

Jowell Global Ltd is a China-based company principally engaged in providing cosmetics, health and nutritional supplements and household products through its e-commerce platform. The Company operates under four sales channels, including online direct sales, authorized retail store distribution, third-party merchants and live streaming marketing. Its product categories include health and nutritional supplements and foods, cosmetics, skin care, body care, baby and children, washing items, fragrances, food, electronics, apparel and household products.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Jowell Global Ltd has a Value Score of 83, which is considered to be undervalued.

When you look at Jowell Global Ltd’s price-to-sales ratio at 0.02 compared to the industry median at 0.34, this company has a lower price relative to revenue compared to its peers. This could make Jowell Global Ltd’s stock more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Jowell Global Ltd’s shareholder yield is lower than its industry median ratio of 0.36%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Jowell Global Ltd’s price-to-book ratio is lower than its industry median ratio of 2.80. This could make Jowell Global Ltd more attractive to investors looking for a new addition to their portfolio.

Kohls Corp’s Value Grade

Value Grade:

Kohl's Corporation is an omnichannel retailer. The Company operates approximately 1,174 stores and a Website (www.Kohls.com). The Company’s Kohl's stores and Website sell private and national brand apparel, footwear, accessories, beauty, and home products. Its Kohl's stores generally carry a consistent merchandise assortment with some differences attributable to local preferences, store size, and Sephora at Kohl's shop-in-shops (Sephora shops). Its Website includes merchandise which is available in its stores, as well as merchandise that is available only online. Its merchandise mix includes both national brands and private brands that are available at Kohl's. Its private portfolio includes various brands, such as Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, and brands that are developed and marketed through agreements with nationally recognized brands, such as Food Network, LC Lauren Conrad, Nine West, and Simply Vera Vera Wang.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Kohls Corp has a Value Score of 99, which is considered to be undervalued.

Kohls Corp’s price-earnings ratio is 7.6 compared to the industry median at 15.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Kohls Corp more attractive for value investors.

Kohls Corp’s price-to-book ratio is higher than its peers. This could make Kohls Corp less attractive for value investors when compared to the industry median at 2.80.

You can read more about Kohls Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Qurate Retail Inc’s Value Grade

Value Grade:

Qurate Retail, Inc. owns controlling and non-controlling interests in a range of video and online commerce companies. It operates through its subsidiaries, QVC, Inc. (QVC), which includes, HSN, Inc. (HSN) and Cornerstone Brands, Inc. (CBI). The Company’s segments include QxH, QVC and CBI. QxH segment markets and sells a variety of consumer products in the United States, primarily by means of its televised shopping programs and via the Internet through their websites and mobile applications. QVC International segment markets and sells a variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications. CBI segment consists of a portfolio of aspirational home and apparel brands in the United States, which sells merchandise through brick-and-mortar retail locations, as well as via the Internet through their websites.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Qurate Retail Inc has a Value Score of 95, which is considered to be undervalued.

Qurate Retail Inc’s price-to-book ratio is higher than its peers. This could make Qurate Retail Inc less attractive for value investors when compared to the industry median at 2.80.

You can read more about Qurate Retail Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Retailers - Department Stores Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Retailers - Department Stores stocks as well as other industrys.

Choosing Which of the 3 Best Retailers - Department Stores Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Jowell Global Ltd stock has a Value Grade of A.
• Kohls Corp stock has a Value Grade of A.
• Qurate Retail Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Retailers - Department Stores industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Retailers - Department Stores Stocks

Want to learn more about Retailers - Department Stores stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Retailers - Department Stores Stocks for Friday, August 23
• 3 Undervalued Retailers - Department Stores Stocks for Thursday, August 22
• Why MINISO Group Holding Ltd - ADR’s (MNSO) Stock Is Up 4.02%
• Why Wayfair Inc’s (W) Stock Is Down 4.59%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.