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ARCO 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 Arcos Dorados (ARCO - Free Report) and Chipotle Mexican Grill (CMG - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Arcos Dorados has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill has a Zacks Rank of #3 (Hold). This means that ARCO'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 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.
ARCO currently has a forward P/E ratio of 21.59, while CMG has a forward P/E of 49.43. We also note that ARCO has a PEG ratio of 0.50. 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. CMG currently has a PEG ratio of 2.47.
Another notable valuation metric for ARCO is its P/B ratio of 7.77. 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, CMG has a P/B of 19.33.
These metrics, and several others, help ARCO earn a Value grade of B, while CMG has been given a Value grade of D.
ARCO sticks out from CMG in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARCO is the better option right now.
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ARCO or CMG: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Arcos Dorados (ARCO - Free Report) and Chipotle Mexican Grill (CMG - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Arcos Dorados has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill has a Zacks Rank of #3 (Hold). This means that ARCO'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 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.
ARCO currently has a forward P/E ratio of 21.59, while CMG has a forward P/E of 49.43. We also note that ARCO has a PEG ratio of 0.50. 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. CMG currently has a PEG ratio of 2.47.
Another notable valuation metric for ARCO is its P/B ratio of 7.77. 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, CMG has a P/B of 19.33.
These metrics, and several others, help ARCO earn a Value grade of B, while CMG has been given a Value grade of D.
ARCO sticks out from CMG in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARCO is the better option right now.