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CCEP vs. MNST: Which Stock Is the Better Value Option?

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Investors interested in Beverages - Soft drinks stocks are likely familiar with Coca-Cola European (CCEP - Free Report) and 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.

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.

Coca-Cola European and Monster Beverage are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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.

CCEP currently has a forward P/E ratio of 14.75, while MNST has a forward P/E of 34.04. We also note that CCEP has a PEG ratio of 2.26. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MNST currently has a PEG ratio of 2.99.

Another notable valuation metric for CCEP is its P/B ratio of 3.25. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MNST has a P/B of 7.91.

Based on these metrics and many more, CCEP holds a Value grade of B, while MNST has a Value grade of D.

Both CCEP and MNST are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CCEP is the superior value option right now.


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Monster Beverage Corporation (MNST) - free report >>

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