We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CCU vs. DEO: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors with an interest in Beverages - Alcohol stocks have likely encountered both Cervecerias Unidas (CCU - Free Report) and Diageo (DEO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Cervecerias Unidas has a Zacks Rank of #1 (Strong Buy), while Diageo has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CCU likely has seen a stronger improvement to its earnings outlook than DEO has recently. But this is just one factor that value investors are interested in.
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.
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.
CCU currently has a forward P/E ratio of 12.04, while DEO has a forward P/E of 20.78. We also note that CCU has a PEG ratio of 0.52. 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. DEO currently has a PEG ratio of 2.67.
Another notable valuation metric for CCU is its P/B ratio of 1.68. 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, DEO has a P/B of 8.33.
These metrics, and several others, help CCU earn a Value grade of B, while DEO has been given a Value grade of C.
CCU stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CCU is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
CCU vs. DEO: Which Stock Should Value Investors Buy Now?
Investors with an interest in Beverages - Alcohol stocks have likely encountered both Cervecerias Unidas (CCU - Free Report) and Diageo (DEO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Cervecerias Unidas has a Zacks Rank of #1 (Strong Buy), while Diageo has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CCU likely has seen a stronger improvement to its earnings outlook than DEO has recently. But this is just one factor that value investors are interested in.
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.
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.
CCU currently has a forward P/E ratio of 12.04, while DEO has a forward P/E of 20.78. We also note that CCU has a PEG ratio of 0.52. 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. DEO currently has a PEG ratio of 2.67.
Another notable valuation metric for CCU is its P/B ratio of 1.68. 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, DEO has a P/B of 8.33.
These metrics, and several others, help CCU earn a Value grade of B, while DEO has been given a Value grade of C.
CCU stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CCU is the superior value option right now.