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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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FMX or MNST: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Beverages - Soft drinks sector might want to consider either Fomento Economico (FMX - Free Report) or Monster Beverage (MNST - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Fomento Economico is sporting a Zacks Rank of #2 (Buy), while Monster Beverage has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FMX likely has seen a stronger improvement to its earnings outlook than MNST has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
FMX currently has a forward P/E ratio of 15.64, while MNST has a forward P/E of 35.90. We also note that FMX has a PEG ratio of 1.78. 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. MNST currently has a PEG ratio of 2.41.
Another notable valuation metric for FMX is its P/B ratio of 1.29. 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, MNST has a P/B of 7.39.
These metrics, and several others, help FMX earn a Value grade of A, while MNST has been given a Value grade of D.
FMX stands above MNST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FMX is the superior value option right now.