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RUTH or CMG: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Ruth's Hospitality and Chipotle Mexican Grill (CMG - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Ruth's Hospitality and Chipotle Mexican Grill are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
RUTH currently has a forward P/E ratio of 16.31, while CMG has a forward P/E of 59.30. We also note that RUTH has a PEG ratio of 1.21. 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. CMG currently has a PEG ratio of 3.01.
Another notable valuation metric for RUTH is its P/B ratio of 7.85. 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, CMG has a P/B of 14.09.
Based on these metrics and many more, RUTH holds a Value grade of B, while CMG has a Value grade of D.
Both RUTH and CMG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RUTH is the superior value option right now.
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RUTH or CMG: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Ruth's Hospitality and Chipotle Mexican Grill (CMG - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Ruth's Hospitality and Chipotle Mexican Grill are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
RUTH currently has a forward P/E ratio of 16.31, while CMG has a forward P/E of 59.30. We also note that RUTH has a PEG ratio of 1.21. 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. CMG currently has a PEG ratio of 3.01.
Another notable valuation metric for RUTH is its P/B ratio of 7.85. 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, CMG has a P/B of 14.09.
Based on these metrics and many more, RUTH holds a Value grade of B, while CMG has a Value grade of D.
Both RUTH and CMG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RUTH is the superior value option right now.