Investors with an interest in Beverages - Soft drinks stocks have likely encountered both Britvic PLC Sponsored ADR (BTVCY - Free Report) and Coca-Cola (KO - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Britvic PLC Sponsored ADR and Coca-Cola are sporting Zacks Ranks of #1 (Strong 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 BTVCY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
BTVCY currently has a forward P/E ratio of 16.33, while KO has a forward P/E of 25.65. We also note that BTVCY has a PEG ratio of 3.63. 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. KO currently has a PEG ratio of 3.75.
Another notable valuation metric for BTVCY is its P/B ratio of 6.77. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, KO has a P/B of 11.27.
Based on these metrics and many more, BTVCY holds a Value grade of B, while KO has a Value grade of D.
BTVCY has seen stronger estimate revision activity and sports more attractive valuation metrics than KO, so it seems like value investors will conclude that BTVCY is the superior option right now.