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BRFS vs. SYY: Which Stock Is the Better Value Option?

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Investors with an interest in Food - Miscellaneous stocks have likely encountered both BRF (BRFS - Free Report) and Sysco (SYY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.

BRF has a Zacks Rank of #2 (Buy), while Sysco has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BRFS has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BRFS currently has a forward P/E ratio of 8.13, while SYY has a forward P/E of 17.33. We also note that BRFS has a PEG ratio of 0.20. 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. SYY currently has a PEG ratio of 2.46.

Another notable valuation metric for BRFS is its P/B ratio of 1.36. 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, SYY has a P/B of 19.14.

These metrics, and several others, help BRFS earn a Value grade of B, while SYY has been given a Value grade of C.

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


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