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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
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FMX vs. MNST: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Beverages - Soft drinks sector might want to consider either Fomento Economico (FMX - Free Report) or Monster Beverage (MNST - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Fomento Economico has a Zacks Rank of #2 (Buy), while Monster Beverage has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that FMX likely has seen a stronger improvement to its earnings outlook than MNST has recently. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
FMX currently has a forward P/E ratio of 22.05, while MNST has a forward P/E of 29.54. We also note that FMX has a PEG ratio of 1.49. 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. MNST currently has a PEG ratio of 1.86.
Another notable valuation metric for FMX is its P/B ratio of 1.77. 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, MNST has a P/B of 6.80.
These metrics, and several others, help FMX earn a Value grade of B, while MNST has been given a Value grade of C.
FMX has seen stronger estimate revision activity and sports more attractive valuation metrics than MNST, so it seems like value investors will conclude that FMX is the superior option right now.