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BJRI or TXRH: Which Is the Better Value Stock Right Now?

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Investors with an interest in Retail - Restaurants stocks have likely encountered both BJ's Restaurants (BJRI - Free Report) and Texas Roadhouse (TXRH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, BJ's Restaurants is sporting a Zacks Rank of #2 (Buy), while Texas Roadhouse has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BJRI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BJRI currently has a forward P/E ratio of 21.20, while TXRH has a forward P/E of 22.84. We also note that BJRI has a PEG ratio of 1.46. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TXRH currently has a PEG ratio of 1.93.

Another notable valuation metric for BJRI is its P/B ratio of 2.99. 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, TXRH has a P/B of 3.84.

These metrics, and several others, help BJRI earn a Value grade of B, while TXRH has been given a Value grade of C.

BJRI 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 BJRI is likely the superior value option right now.


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BJ's Restaurants, Inc. (BJRI) - free report >>

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