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TAP vs. NAPA: Which Stock Is the Better Value Option?

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Investors interested in Beverages - Alcohol stocks are likely familiar with Molson Coors Brewing (TAP - Free Report) and The Duckhorn Portfolio, Inc. (NAPA - 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.

Molson Coors Brewing has a Zacks Rank of #1 (Strong Buy), while The Duckhorn Portfolio, Inc. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that TAP likely has seen a stronger improvement to its earnings outlook than NAPA 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.

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.

TAP currently has a forward P/E ratio of 10.98, while NAPA has a forward P/E of 13.98. We also note that TAP has a PEG ratio of 2.17. 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. NAPA currently has a PEG ratio of 7.17.

Another notable valuation metric for TAP is its P/B ratio of 1. 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, NAPA has a P/B of 1.12.

These are just a few of the metrics contributing to TAP's Value grade of B and NAPA's Value grade of C.

TAP sticks out from NAPA in both our Zacks Rank and Style Scores models, so value investors will likely feel that TAP is the better option right now.


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Molson Coors Beverage Company (TAP) - free report >>

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