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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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FMX or MNST: Which Is the Better Value Stock Right Now?
Investors interested in Beverages - Soft drinks stocks are likely familiar with Fomento Economico (FMX - Free Report) and Monster Beverage (MNST - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Fomento Economico has a Zacks Rank of #2 (Buy), while Monster Beverage has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FMX likely has seen a stronger improvement to its earnings outlook than MNST has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FMX currently has a forward P/E ratio of 22.36, while MNST has a forward P/E of 35.64. We also note that FMX has a PEG ratio of 1. 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 1.62.
Another notable valuation metric for FMX is its P/B ratio of 2.63. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MNST has a P/B of 7.37.
Based on these metrics and many more, FMX holds a Value grade of B, while MNST has a Value grade of D.
FMX stands above MNST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FMX is the superior value option right now.