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TXRH or CMG: Which Is the Better Value Stock Right Now?
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Investors interested in Retail - Restaurants stocks are likely familiar with Texas Roadhouse (TXRH - Free Report) 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 Texas Roadhouse and Chipotle Mexican Grill are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
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.
TXRH currently has a forward P/E ratio of 23.47, while CMG has a forward P/E of 45.31. We also note that TXRH has a PEG ratio of 1.71. 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 1.93.
Another notable valuation metric for TXRH is its P/B ratio of 6.44. 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 17.97.
Based on these metrics and many more, TXRH holds a Value grade of B, while CMG has a Value grade of D.
Both TXRH and CMG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TXRH is the superior value option right now.
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TXRH or CMG: Which Is the Better Value Stock Right Now?
Investors interested in Retail - Restaurants stocks are likely familiar with Texas Roadhouse (TXRH - Free Report) 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 Texas Roadhouse and Chipotle Mexican Grill are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
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.
TXRH currently has a forward P/E ratio of 23.47, while CMG has a forward P/E of 45.31. We also note that TXRH has a PEG ratio of 1.71. 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 1.93.
Another notable valuation metric for TXRH is its P/B ratio of 6.44. 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 17.97.
Based on these metrics and many more, TXRH holds a Value grade of B, while CMG has a Value grade of D.
Both TXRH and CMG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TXRH is the superior value option right now.