Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Beverages - Soft drinks stocks have likely encountered both Primo Brands (PRMB - Free Report) and Monster Beverage (MNST - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Primo Brands and Monster Beverage are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that PRMB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

PRMB currently has a forward P/E ratio of 17.56, while MNST has a forward P/E of 38.99. We also note that PRMB has a PEG ratio of 1.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MNST currently has a PEG ratio of 2.93.

Another notable valuation metric for PRMB is its P/B ratio of 2.87. 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 9.44.

Based on these metrics and many more, PRMB holds a Value grade of B, while MNST has a Value grade of F.

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

Published in