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ABEV or CABGY: Which Is the Better Value Stock Right Now?

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Investors interested in Beverages - Alcohol stocks are likely familiar with Ambev (ABEV - Free Report) and Carlsberg AS (CABGY - Free Report) . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Ambev and Carlsberg AS are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that ABEV's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ABEV currently has a forward P/E ratio of 18.97, while CABGY has a forward P/E of 19.14. We also note that ABEV has a PEG ratio of 2.69. 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. CABGY currently has a PEG ratio of 2.74.

Another notable valuation metric for ABEV is its P/B ratio of 2.96. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CABGY has a P/B of 4.49.

Based on these metrics and many more, ABEV holds a Value grade of B, while CABGY has a Value grade of C.

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


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Carlsberg AS (CABGY) - free report >>

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