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Cracker Barrel Old Country Store, Inc. (CBRL) - free report >>
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Cracker Barrel Old Country Store, Inc. (CBRL) - free report >>
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CBRL vs. WEN: Which Stock Is the Better Value Option?
Investors interested in Retail - Restaurants stocks are likely familiar with Cracker Barrel Old Country Store (CBRL - Free Report) and Wendy's (WEN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Cracker Barrel Old Country Store has a Zacks Rank of #2 (Buy), while Wendy's has a Zacks Rank of #4 (Sell). This means that CBRL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
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.
CBRL currently has a forward P/E ratio of 17.31, while WEN has a forward P/E of 37.65. We also note that CBRL has a PEG ratio of 1.73. 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. WEN currently has a PEG ratio of 3.07.
Another notable valuation metric for CBRL is its P/B ratio of 6.45. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WEN has a P/B of 7.64.
These metrics, and several others, help CBRL earn a Value grade of B, while WEN has been given a Value grade of D.
CBRL stands above WEN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CBRL is the superior value option right now.