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TXRH vs. WEN: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Retail - Restaurants stocks have likely encountered both Texas Roadhouse (TXRH - Free Report) and Wendy's (WEN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Texas Roadhouse and Wendy's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TXRH is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
TXRH currently has a forward P/E ratio of 21.66, while WEN has a forward P/E of 24.76. We also note that TXRH has a PEG ratio of 1.55. 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. WEN currently has a PEG ratio of 2.63.
Another notable valuation metric for TXRH is its P/B ratio of 5.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WEN has a P/B of 9.66.
These are just a few of the metrics contributing to TXRH's Value grade of B and WEN's Value grade of C.
TXRH sticks out from WEN in both our Zacks Rank and Style Scores models, so value investors will likely feel that TXRH is the better option right now.
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TXRH vs. WEN: Which Stock Should Value Investors Buy Now?
Investors with an interest in Retail - Restaurants stocks have likely encountered both Texas Roadhouse (TXRH - Free Report) and Wendy's (WEN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Texas Roadhouse and Wendy's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TXRH is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
TXRH currently has a forward P/E ratio of 21.66, while WEN has a forward P/E of 24.76. We also note that TXRH has a PEG ratio of 1.55. 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. WEN currently has a PEG ratio of 2.63.
Another notable valuation metric for TXRH is its P/B ratio of 5.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WEN has a P/B of 9.66.
These are just a few of the metrics contributing to TXRH's Value grade of B and WEN's Value grade of C.
TXRH sticks out from WEN in both our Zacks Rank and Style Scores models, so value investors will likely feel that TXRH is the better option right now.