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ABEV or DEO: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Ambev (ABEV - Free Report) and Diageo (DEO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, Ambev is sporting a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ABEV has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
ABEV currently has a forward P/E ratio of 12.29, while DEO has a forward P/E of 14.02. We also note that ABEV has a PEG ratio of 2.16. 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. DEO currently has a PEG ratio of 3.42.
Another notable valuation metric for ABEV is its P/B ratio of 2.06. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, DEO has a P/B of 4.03.
Based on these metrics and many more, ABEV holds a Value grade of A, while DEO has a Value grade of C.
ABEV is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ABEV is likely the superior value option right now.
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ABEV or DEO: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Ambev (ABEV - Free Report) and Diageo (DEO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, Ambev is sporting a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ABEV has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
ABEV currently has a forward P/E ratio of 12.29, while DEO has a forward P/E of 14.02. We also note that ABEV has a PEG ratio of 2.16. 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. DEO currently has a PEG ratio of 3.42.
Another notable valuation metric for ABEV is its P/B ratio of 2.06. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, DEO has a P/B of 4.03.
Based on these metrics and many more, ABEV holds a Value grade of A, while DEO has a Value grade of C.
ABEV is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ABEV is likely the superior value option right now.