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ARMK or CHEF: Which Is the Better Value Stock Right Now?

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Investors with an interest in Food - Miscellaneous stocks have likely encountered both Aramark (ARMK - Free Report) and Chefs' Warehouse (CHEF - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Aramark has a Zacks Rank of #2 (Buy), while Chefs' Warehouse has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ARMK is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

ARMK currently has a forward P/E ratio of 17.75, while CHEF has a forward P/E of 36.06. We also note that ARMK has a PEG ratio of 2.06. 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. CHEF currently has a PEG ratio of 2.40.

Another notable valuation metric for ARMK is its P/B ratio of 3.32. 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, CHEF has a P/B of 3.44.

Based on these metrics and many more, ARMK holds a Value grade of B, while CHEF has a Value grade of C.

ARMK has seen stronger estimate revision activity and sports more attractive valuation metrics than CHEF, so it seems like value investors will conclude that ARMK is the superior option right now.


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The Chefs' Warehouse, Inc. (CHEF) - free report >>

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