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DRI vs. WEN: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Darden Restaurants (DRI - Free Report) and Wendy's (WEN - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Darden Restaurants has a Zacks Rank of #2 (Buy), while Wendy's has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that DRI likely has seen a stronger improvement to its earnings outlook than WEN has recently. But this is only part of the picture 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 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.
DRI currently has a forward P/E ratio of 19.19, while WEN has a forward P/E of 23.83. We also note that DRI has a PEG ratio of 1.95. 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 2.46.
Another notable valuation metric for DRI is its P/B ratio of 9.02. 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, WEN has a P/B of 11.23.
These metrics, and several others, help DRI earn a Value grade of B, while WEN has been given a Value grade of C.
DRI has seen stronger estimate revision activity and sports more attractive valuation metrics than WEN, so it seems like value investors will conclude that DRI is the superior option right now.
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DRI vs. WEN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Darden Restaurants (DRI - Free Report) and Wendy's (WEN - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Darden Restaurants has a Zacks Rank of #2 (Buy), while Wendy's has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that DRI likely has seen a stronger improvement to its earnings outlook than WEN has recently. But this is only part of the picture 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 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.
DRI currently has a forward P/E ratio of 19.19, while WEN has a forward P/E of 23.83. We also note that DRI has a PEG ratio of 1.95. 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 2.46.
Another notable valuation metric for DRI is its P/B ratio of 9.02. 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, WEN has a P/B of 11.23.
These metrics, and several others, help DRI earn a Value grade of B, while WEN has been given a Value grade of C.
DRI has seen stronger estimate revision activity and sports more attractive valuation metrics than WEN, so it seems like value investors will conclude that DRI is the superior option right now.