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ABEV or DEO: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Ambev (ABEV - Free Report) or Diageo (DEO - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Right now, Ambev is sporting a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ABEV has an improving earnings 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ABEV currently has a forward P/E ratio of 19.59, while DEO has a forward P/E of 26.42. We also note that ABEV has a PEG ratio of 2.49. 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. DEO currently has a PEG ratio of 2.86.
Another notable valuation metric for ABEV is its P/B ratio of 2.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DEO has a P/B of 9.18.
These metrics, and several others, help ABEV earn a Value grade of B, while DEO has been given a Value grade of C.
ABEV stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ABEV is the superior value option right now.
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ABEV or DEO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Ambev (ABEV - Free Report) or Diageo (DEO - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Right now, Ambev is sporting a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ABEV has an improving earnings 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ABEV currently has a forward P/E ratio of 19.59, while DEO has a forward P/E of 26.42. We also note that ABEV has a PEG ratio of 2.49. 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. DEO currently has a PEG ratio of 2.86.
Another notable valuation metric for ABEV is its P/B ratio of 2.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DEO has a P/B of 9.18.
These metrics, and several others, help ABEV earn a Value grade of B, while DEO has been given a Value grade of C.
ABEV stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ABEV is the superior value option right now.