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KDP vs. MNST: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Beverages - Soft drinks sector might want to consider either Keurig Dr Pepper, Inc (KDP - Free Report) or Monster Beverage (MNST - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Keurig Dr Pepper, Inc and Monster Beverage are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KDP 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.

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.

KDP currently has a forward P/E ratio of 11.14, while MNST has a forward P/E of 31.51. We also note that KDP has a PEG ratio of 1.28. 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. MNST currently has a PEG ratio of 2.39.

Another notable valuation metric for KDP is its P/B ratio of 1.35. 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, MNST has a P/B of 8.57.

These are just a few of the metrics contributing to KDP's Value grade of B and MNST's Value grade of F.

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

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