Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Molson Coors Brewing (TAP - Free Report) or Boston Beer (SAM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Molson Coors Brewing has a Zacks Rank of #1 (Strong Buy), while Boston Beer has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that TAP likely has seen a stronger improvement to its earnings outlook than SAM has recently. However, value investors will care about much more than just this.

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.

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.

TAP currently has a forward P/E ratio of 9.42, while SAM has a forward P/E of 23.20. We also note that TAP has a PEG ratio of 1.55. 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. SAM currently has a PEG ratio of 1.92.

Another notable valuation metric for TAP is its P/B ratio of 0.92. 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, SAM has a P/B of 3.01.

These are just a few of the metrics contributing to TAP's Value grade of A and SAM's Value grade of D.

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


See More Zacks Research for These Tickers


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


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

The Boston Beer Company, Inc. (SAM) - free report >>

Published in