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YUMC or CMG: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Retail - Restaurants sector might want to consider either Yum China Holdings (YUMC - Free Report) or Chipotle Mexican Grill (CMG - 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.
Yum China Holdings has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that YUMC likely has seen a stronger improvement to its earnings outlook than CMG has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
YUMC currently has a forward P/E ratio of 17.78, while CMG has a forward P/E of 54.70. We also note that YUMC has a PEG ratio of 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CMG currently has a PEG ratio of 2.50.
Another notable valuation metric for YUMC is its P/B ratio of 2.27. 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, CMG has a P/B of 26.04.
These are just a few of the metrics contributing to YUMC's Value grade of B and CMG's Value grade of F.
YUMC stands above CMG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that YUMC is the superior value option right now.
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YUMC or CMG: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Retail - Restaurants sector might want to consider either Yum China Holdings (YUMC - Free Report) or Chipotle Mexican Grill (CMG - 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.
Yum China Holdings has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that YUMC likely has seen a stronger improvement to its earnings outlook than CMG has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
YUMC currently has a forward P/E ratio of 17.78, while CMG has a forward P/E of 54.70. We also note that YUMC has a PEG ratio of 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CMG currently has a PEG ratio of 2.50.
Another notable valuation metric for YUMC is its P/B ratio of 2.27. 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, CMG has a P/B of 26.04.
These are just a few of the metrics contributing to YUMC's Value grade of B and CMG's Value grade of F.
YUMC stands above CMG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that YUMC is the superior value option right now.