Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Anheuser-Busch Inbev (BUD - Free Report) or Campari Group . 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.
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.
Currently, Anheuser-Busch Inbev has a Zacks Rank of #2 (Buy), while Campari Group has a Zacks Rank of #3 (Hold). This means that BUD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BUD currently has a forward P/E ratio of 18.89, while DVDCY has a forward P/E of 33.89. We also note that BUD has a PEG ratio of 2.07. 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. DVDCY currently has a PEG ratio of 4.52.
Another notable valuation metric for BUD is its P/B ratio of 2.07. 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, DVDCY has a P/B of 4.12.
These are just a few of the metrics contributing to BUD's Value grade of B and DVDCY's Value grade of F.
BUD stands above DVDCY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BUD is the superior value option right now.