Back to top

Image: Bigstock

BYD or RRR: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Gaming sector have probably already heard of Boyd Gaming (BYD - Free Report) and Red Rock Resorts (RRR - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Boyd Gaming is sporting a Zacks Rank of #1 (Strong Buy), while Red Rock Resorts has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BYD likely has seen a stronger improvement to its earnings outlook than RRR has recently. But this is just one piece of the puzzle 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.

BYD currently has a forward P/E ratio of 11.10, while RRR has a forward P/E of 26.16. We also note that BYD has a PEG ratio of 2.64. 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. RRR currently has a PEG ratio of 9.69.

Another notable valuation metric for BYD is its P/B ratio of 4.55. 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, RRR has a P/B of 157.40.

Based on these metrics and many more, BYD holds a Value grade of B, while RRR has a Value grade of C.

BYD stands above RRR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BYD is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Boyd Gaming Corporation (BYD) - free report >>

Red Rock Resorts, Inc. (RRR) - free report >>

Published in